Saving a home deposit takes longer

12/07/2010

The second annual Bankwest First Time Buyer Deposit Report shows that the average first time buyer couple would need to save for 4.5 years to raise a conservative (20%) deposit to buy their first house as at March 2010, up from 3.7 years as at March 2009. Five years ago in March 2005, the time taken was 4.0 years.

The time to save a deposit calculation is based on a first time buyer (FTB) couple saving 20% of their combined pre-tax income annually to raise a 20% deposit and includes federal and state government first home owners’ grant in the deposit. On this basis in March 2010 a first time buyer couple would need to raise a deposit of $85,800 to purchase the median house and would be saving $17,619 annually out of a combined income of $88,093.

The increase in the time taken to save a deposit during the past year – from 3.7 to 4.5 years - reflects the recent reduction in the First Home Owners Grants from $14,000 to $7,000 and the 10% nation-wide increase in house prices since March 2009.

Source: Bankwest