Time taken to save a deposit improves

According to the ANZ CoreLogic Housing Affordability Report 2023, the median time required to save a 20 per cent deposit has decreased to 10.5 years.

This came despite the rising prices of houses and rentals, which have contributed to the overall affordability deterioration.

The report highlighted that weekly rents have surged by an estimated $115 per week until April, while mortgage payments have increased by $318, fuelled by rising interest rates and the rebound in home values.

Although there was a 9.1 per cent decline in home values between May 2022 and February 2023, they have been steadily increasing since then, following the record highs observed during the pandemic.

The report showed a median-income household now requires 30.8 per cent of its income to service a new lease nationally. At the lower household income level, the percentage rises to 51.6 per cent, indicating significant pressure on households with lower incomes.

Despite the ongoing challenges in housing affordability, the time required to save for a deposit has reduced to 10.5 years as of March 2023.

This marked a decline from the peak of 11.7 years (revised upwards) recorded a year earlier.

Sydney remains the most unaffordable market, with an estimated 51.6 per cent of income needed to service a new mortgage and approximately 12 years required to accumulate a 20 per cent deposit.

In other capital cities, it would take 11.4 years in Melbourne, 10.1 years in Brisbane, 10.8 years in Adelaide, and 9.6 years in Canberra.

Comparatively, the smaller capitals with lower home values have shorter saving times, with Darwin at 6.5 years and Perth at 7.7 years.

These findings align with Domain’s annual First Home Buyer Report, which revealed that, on average, it took a couple four years and 11 months to save a 20 per cent deposit for an entry-priced house in February 2023.

This represented a reduction of six months compared to February 2022.

According to Domain, most capital cities experienced a decline in deposit-saving time between the two periods, except for Adelaide, where an extra month was required due to continued property price increases in South Australia.

[Related: Six months off deposit saving time: Domain]

Kate Aubrey is the senior content producer of Momentum Media's mortgages titles: The Adviser and Mortgage Business.

Prior to joining Momentum Media, Kate covered regional and breaking news for ABC Radio for more than three years.

She has a Master of Arts in Journalism from the University of Melbourne and a Bachelor of International Business and Business Management from Griffith University.

Email Kate at: This email address is being protected from spambots. You need JavaScript enabled to view it.