Housing prices, Australia: Living with parents for five years will see you save $138,000 deposit

Young Aussies desperate to get on the housing ladder are losing hope they’ll ever own a home but new data has revealed there is one fool-proof hack to saving for a deposit – moving back in with your parents.

A new survey found more than two-thirds (72 per cent) of Australians between the ages of 18 and 34 believe they will never be able to afford to buy their own home. 

But Aussies willing to move back in with your parents for five years can save an incredible $138,000 – which is more than enough for a reasonably-sized house or apartment.

A Resolve Strategic survey found younger Aussies have an incredibly grim outlook on home ownership after the Reserve Bank hiked interest rates nine times since May 2022 to the current level of 3.35 per cent.

Research done by comparison site Finder found the average cost of living out of home and renting adds up to $24,927 a year and could set your finances back by up to 10 years. 

Finder money expert Sarah Megginson said living at home can be a huge help for young people trying to get onto the property ladder, especially with inflation hitting a rate of 7.8 per cent in the December quarter. 

A massive 72 per cent of Aussies aged 18-34 believe they will never be able to buy a house. Pictured is a for sale sign in Canberra

‘Staying at home for a few extra years rent-free and taking advantage of compound interest can add tens of thousands of dollars to a person’s savings,’ she said.

‘Often, people move home to save but they keep up poor spending habits, so they don’t end up ahead financially. 

‘Having a budget in place and minimising spending is the key to maximising your savings.’ 

Someone renting spends around $15,000 a year on rent, almost $10,000 on bills and groceries (including alcohol) and $163 on household maintenance items – an average of $24,927 a year. 

Most will also spend an additional $950 on one-off items such as furniture, appliances and kitchenware on top of that. 

The average young Australian (millennial and Gen Z) has $17,917 in savings and saves around $872 per month, according to Finder. 

Ms Megginson acknowledged that despite the tough economic times and ever increasing prices, living with parents was not always possible.

For renters looking to buy their own place, she suggested creating a budget strategy.

‘Set yourself a timeframe for buying a home, then work out how much you need to save each month to meet your target,’ she said.

For renters looking to buy their own place, creating a budget strategy is a good place to start. Pictured are young renters in a share house

The average cost of living out of home adds up to $24,927 a year (pictured) and could set your finances back by up to 10 years

‘Consider moving to a cheaper suburb or downsizing to a smaller place. Even a small difference in your weekly rent could save you thousands of dollars a year.’

Ms Megginson advised people also look to cut down on unnecessary expenses, such as pricey gym memberships and eating out a lot.

She said the one advantage of all the rate rises since last May is that banks now offer higher interest on savings. 

That means ‘there is great value to be had in a good savings account – any money you can save can be making more money for you in the right savings account’.