Let's face it, recent home loan headlines have been somewhat depressing. The good news is that first-time home buyers in Australia, especially in Queensland Area such as Townsville, Brisbane, and the Gold Coast are now getting closer to their 20% deposit goal.
The findings of the 2023 Domain First Home Buyer Report have brought some well-deserved good news to first-time homebuyers.
The analysis reveals that compared to April 2022, the month before the first of ten consecutive cash rate hikes, first-time homebuyers between the ages of 25 and 34 are saving for their down payment more quickly.
State by state breakdown
The biggest drop in average deposit-saving times occurred in Sydney, where it now takes 6 years and 8 months to save a deposit as opposed to 8 years and 1 month in April 2022.
Canberra (now 6 years) and Brisbane (now 4 years on average to save a deposit) came in second and both saw a 14-month decline.
Darwin (3 years 6 months) and Melbourne (now 5 years 7 months) were the next cities, both with 11-month shorter saving periods.
Smaller drops of 5 months, 2 months, and 1 month, respectively, were observed in Hobart (5 years, 8 months), Perth (3 years, 7 months), and Adelaide (4 years, 9 months).
Why is saving a deposit now quicker?
As a result of rising interest rates, national home prices began to steadily decline in 2022. CoreLogic reported a record national home value decline of 8.40% in January 2023.
Additionally, the cost of your 20% deposit rises as real estate prices decline.
The ABS data demonstrates that wages have increased in both the public and private sectors while the unemployment rate is hovering at a low 3.5%, which also contributes to the shorter savings periods. Meanwhile, savings accounts now earn more interest as a result of rate increases.
Overcoming potential challenges
Despite the encouraging new CoreLogic findings, many people may still struggle to save a 20% deposit.
Because of the rising cost of living, it now takes a significant portion of a paycheck just to cover necessities, leaving less money for savings.
Additionally, borrowing capacity has decreased and mortgage serviceability may be challenging due to rising home loan interest rates.
House prices have reportedly started to stabilize, according to CoreLogic.
How then can a first-time home buyer expedite the purchasing process?
Take advantage of government incentives
Utilizing government programs can, on average, shorten the time it takes to buy a home by 4 to 4.5 years.
For instance, the First Home Guarantee may allow you to avoid the eye-watering lenders’ mortgage insurance fee by only requiring a 5% deposit.
However, since there are only a limited number of spots available, you’ll need to act quickly. The approaching July allocation period makes it a good idea to sign up with a mortgage broker (like us!) in Queensland such as Townsville, Brisbane, and the Gold Coast as soon as possible.
We have the expertise to move your First Home Guarantee application along.
We can also check if you qualify for the most savings possible by combining different government incentives.
Discover more
We can assist you in putting a plan in place if you’re prepared to take the plunge and purchase your first home.
We’ll calculate your borrowing power, assess your finance options, and assist in taking advantage of government incentives.
Call us today.
To learn more, contact Premium Finance Group Australia, your trusted mortgage broker in Townsville, Queensland, at (07) 4720 8888 or email us at finance@pfga.com.au
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