Saving up for a mortgage deposit takes more than a decade in Australia’s biggest city for someone on an average salary.
Sydney is home to some of the world’s most expensive real estate with Darling Point in the eastern suburbs having a median price of $6.5million.
Even after a record slump, property values in the city are still dear with $956,249 being the mid-point price to get a home with a backyard.
Prices surged by 3.1 per cent in November alone, the biggest monthly increase in 31 years.
Financial comparison website Finder has calculated how long it took in each capital city to afford a 20 per cent home loan deposit – a level needed to avoid mortgage insurance.
Financial comparison website calculated it would take ten years and nine months to save up for a 20 per cent mortgage deposit in Sydney where median prices are a shade under $1million (pictured is a home at Greystanes in the city’s west)
While the federal government has introduced a $500million First Home Loan Deposit Scheme – sparing first-home buyers from having to save for a 20 per cent deposit – the price limits are well below the median price in Australia’s big cities.
Finder calculations showed that someone on an average, full-time salary of $88,145, after penalty rates, would need to spend ten years and nine months scraping together $191,249 for a deposit in Sydney.
In Melbourne, where the median house price is $774,023, saving up for a $154,800 deposit would take eight years and eight months.
Brisbane is a little more manageable with a $109,000 deposit taking six years and four months in a city where the median house price is $543,992.
Adelaide was even easier with a borrower taking five years and four months to save up $93,854 to buy a typical house priced at $469,270.
Perth took slightly longer, with a home buyer needing to dedicate five years and one month to save up $91,000 for a $453,393 house.
In Melbourne, where the median house price is $774,023, saving up for a $154,800 deposit would take eight years and eight months (pictured is a house at Avondale Heights in the city’s north-west)
Hobart borrowers needed to save up for five years and nine months to put together a $101,800 deposit for a $509,177 house.
Finder insights manager Graham Cooke, a consumer researcher, said record-low interest rates meant investors were flooding the property market and locking out the young.
‘Especially in places like Sydney and Melbourne, this is making the property market increasingly inaccessible for first-home buyers,’ he told Daily Mail Australia on Friday.
With downsizing baby boomers also competing for property, millennials were finding it particularly challenging to save up for a deposit with wages growth continuing to stagnate.
‘It just takes a very, very long time on a standard wage to save those deposits,’ Mr Cooke said.
A young person buying a median-price Sydney house would also fail to qualify for the federal government’s First Home Loan Deposit Scheme.
Brisbane is a little more manageable with a $109,000 deposit taking six years and four months in a city where the median house price is $543,992 (pictured is a Gordon Park house in the city’s inner north)
This is where they a borrower only has to stump up for a five per cent deposit as taxpayers fund the balance of the 20 per cent deposit.
The scheme, however, is only available in Sydney for homes worth up to $700,000 – a level well below the city’s median house and apartment price of $840,072.
‘It’s really not a program that a huge amount of first-home buyers are going to be able to have access to,’ Mr Cooke said.
A first-home buyer wanting a typical, $956,249 house in Australia’s biggest city would still have to pay more than $34,000 in stamp duty.
Property newcomers only get a complete exemption on stamp duty if the house or unit sells for less than $650,000.
None of that would be relevant for a multi-millionaire buying real estate in Australia’s richest suburbs.
Darling Point in Sydney’s eastern suburbs had Australia’s highest median price of $6.5million in 2019, CoreLogic has revealed
Darling Point had Australia’s highest median price of $6.5million in 2019, CoreLogic has revealed.
Bellevue Hill, another suburb in the eastern suburbs, was next with a mid-point price of $5.4million followed by nearby Vaucluse on $4.9million.
Toorak, Melbourne’s only entry in the top 10, had a median price of $4.7million.
The rest were in Sydney, with Rose Bay ($4.2million), Double Bay ($4.1million), Mosman ($3.9million), Woolwich ($3.87million) and Dover Heights ($3.6million) rounding out the elite list.