Rising prices in the property market may be good news for investors and home owners, but it is just another blow for first home buyers, many of whom are already struggling to save for a deposit.
According to the Bankwest First Time Buyer Deposit report, first home buyers will need to save for an average of 4.1 years to reach a 20% deposit, compared to 3.9 years in 2013. Over the last 12 months the median house value has risen by 7.1% to $469,000, which means that borrowers will need to save an extra $6000 for a home loan. Based on the median house price, borrowers will need to save $93,800 for a deposit, compared to $87,600 in 2013.
The report also found that first home buyers struggled more to save for a deposit in certain areas. For example, in New South Wales, it took first home buyers an average of 4.8 years to save $112,700 for a deposit (based on the NSW median house value). The other states that had the biggest delay were Victoria with 4.4 years, the Northern Territory with 4.1 years and the ACT with 4 years.
The remaining states have a lower median house value, making it a little easier for first home buyers to save a sufficient deposit. In Queensland it took 3.8 years, Western Australia took 3.7 years, South Australia too 3.3 years and Tasmania had just 2.7 years. The report also found that regional areas throughout Australia were the most affordable option for first home buyers.
With 2015 just around the corner, you may be thinking about getting your foot on the property ladder and moving forward. Based on these statistics, you may want to consider looking further out from the cities and finding a more affordable area. If you are not keen about moving to a regional area, consider purchasing an investment property instead. By purchasing an investment property first, you can use the rental income to help meet the mortgage repayments and then when you find a suitable property to live in for the right price, you can use the equity saved in your investment property and put it towards the deposit of your own home.
Many first home buyers assume you have to have experience in buying properties in order to be an investor, but that’s not the case. There are plenty of simple and easy to use tools available online that can help you towards purchasing your first investment property. You can give our team a call on 137262 and they can help discuss your finance options with you.