Deposit gap locking out FHBs

The latest PEXA Buyer Deposit CY24 Report, based on exclusive analysis of property settlement data in NSW, Victoria, and Queensland from January 2020 to December 2024, painted a concerning picture for first home buyers.

The findings showed that the deposit gap – the time it takes to save for a home deposit without family financial help – remains a key barrier.

In NSW, it can take up to 20 years for individual buyers to save a deposit for a median-priced house. In Victoria, the time frame is nine to 17 years and in Queensland, 10–20 years.

The report also identified regional migration trends, particularly in NSW and Queensland, where buyers priced out of major cities are increasingly turning to more affordable homes in regional areas.

In NSW, Sydney’s extreme housing market continues to drive a net annual outflow of 20,000–30,000 residents to regional towns.

Melbourne’s outer suburbs feature prominently in the list of locations with the highest loan-to-valuation ratios (LVRs), highlighting how affordability pressures are spreading to city fringes.

PEXA chief economist Julie Toth said: “This PEXA data shows the broader housing market remains under pressure and reveals a persistent wealth divide. Areas with high LVRs are often dominated by first-home buyers unable to meet the high deposit requirements.

“Regional towns show a high proportion of loans with LVRs above 80 per cent, further stressing the difficulties faced by those trying to enter the market, especially in the capital cities where affordable housing remains scarce.

“The current election campaign focus on housing affordability reflects the reality of the pressure Australian home buyers and young families in particular are facing.”

Toth said that many first home buyers are effectively locked out of inner-city suburbs, where prices remain prohibitively high.

According to the report, home ownership sits at a record low for Australians under 40, with home ownership rates for the age cohorts of 25–29, 30–34, and 35–39 sitting at just 36 per cent, 50 per cent, and 59 per cent, respectively.

This highlighted a drastic decline from the peaks recorded in the late 1970s–80s, where home ownership rates ranged between 65 per cent and 82 per cent for these age cohorts.

[RELATED: Housing stress top of mind this federal election]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.