HOME > BLOG > Home Loan Advice > Is it time to get creative when saving for a home loan deposit?

New research from State Custodians reveals people still largely feel the only way they’ll get a home deposit is by saving wages from their current job. However, it may be worth thinking outside of the box.

Getting together a home loan deposit for a property is often one of the biggest financial tests people face. Nowadays, with 20 per cent deposits the norm, it’s become even more of a challenge.

State Custodians polled 1,006 Australians nationwide about deposits and discovered that 45 per cent say the main way they’d expect to gather a home loan deposit together would be from wages savings. Yet in reality this is proving somewhat difficult to do considering wages are still flat and the cost of living is going up. Those in a couple were hoping to pool resources and wages savings with a partner (29 per cent) and 26 per cent were also hopeful that they could save for a deposit from a new, more highly paid job.

Meanwhile, one in five people admitted that they would be relying on their family and loved ones in some way to give them a leg up. One in four (25 per cent) say they’d make lifestyle sacrifices such as moving back in with parents to be able to save money, some 20 per cent say they would need an inheritance from parents or family, whilst 15 per cent would seek out a loan or a financial gift from parents, family and or friends.

Which of these are ways you could realistically expect to save/get a deposit together to buy your own home?
2018 results 2017 results
Saving wages from my current job 45% 39%
Pooling resources with a spouse/partner 29% 25%
Saving wages from a new, more highly-paid job 26% 28%
Making lifestyle sacrifices such as moving back in with parents to be able to save money 25% 27%
I will never be able to afford a deposit for any kind of home 24% 27%
An inheritance from parents/family 20% 24%
Putting major plans such as having children on hold 19%* 11%*
Parents/ family/ friends either lending or gifting an amount to you 15%* 23%*
Pooling resources with 1 or more people/friends 9% 5%
*Those in blue: significant differences

The latest statistics, when compared to figures compiled on the same topic a year ago, also reveal a couple of significant differences. Specifically, that more people in 2018 are planning to put major plans such as having kids on hold compared to 2017 (19 per cent vs 11 per cent) and that less people this year were hopeful of their loved ones gifting or lending them an amount (15 per cent compared to 23 per cent.


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Almost half of those surveyed say they'd rely on wages to build up a deposit.

Thinking outside the square

  • Whilst it continues to be a challenge to get a deposit together, the good news for those who are almost there is that now is a good time to be getting into the market. According to CoreLogic the market continued to weaken in September, with national dwelling values dipping 0.5 per cent over the month, marking twelve months of consistently falling values. CoreLogic reports dwelling values tracked lower across five of the eight capital cities in September while five of the seven ‘rest of state’ regions recorded a fall in values over the month.

    State Custodians’ General Manager Joanna Pretty says potential home owners need to think deeply about their situation when it comes to getting a deposit. “You can’t just expect savings to suddenly materialise from your wages,” she says. “In order to make it happen you need to employ a number of savings tactics over a period of time. However, you also need to think of as many different ways you can reach your goal and assess how much you can sacrifice.

    Would it really be a big deal to move back in with your parents for a year? Can you have a frank discussion with loved ones and inquire about a gift, or buy a place with a sibling? If you’re disciplined, you’ll eventually get there.

    Joanna Pretty, General Manager, State Custodians

Set yourself a timeframe

  • As it will take time to build up a deposit, especially if you’re starting from scratch, assess what kind of property you aim to buy and in what area. Look at prices in the market, examine what properties have sold for over the past five years, and take into account that prices are likely to rise in many places year on year. Give yourself a long-term time frame of several years or more to accumulate funds. Data from Domain illustrates1 the types of timeframes required to save for a deposit.

    Greater capital city Suburb Entry price Years needed*
    Sydney houses lowest Wyong $483,000 4.7 years
    Sydney houses highest The Hills Shire $1,100,000 10.5 years
    Sydney units lowest Wyong $375,000 3.67 years
    Sydney units highest Sutherland Shire $643,000 6.17 years
    Melbourne houses lowest Melton $424,000 4.33 years
    Melbourne houses highest Moonee Valley $815,000 8.33 years
    Melbourne units lowest Greater Dandenong $305,000 3.17 years
    Melbourne units highest Yarra Ranges $455,000 4.67 years
    Brisbane houses lowest Ipswich $327,000 3.33 years
    Brisbane houses highest Brisbane $537,500 5.42 years
    Brisbane units lowest Logan $229,000 2.33 years
    Brisbane units highest Redland $385,000 3.92 years
    Adelaide houses lowest Playford $215,000 2.25 years
    Adelaide houses highest Adelaide Hills $445,000 4.75 years
    Adelaide units lowest Salisbury $200,000 2.08 years
    Adelaide units highest Unley $298,000 3.17 years
    Perth houses lowest Kwinana $268,000 2.42 years
    Perth houses highest Bassendean $385,000 3.50 years
    Perth units lowest Mandurah $215,000 1.92 years
    Perth units highest Vincent $327,000 3.00 years
    Hobart houses lowest Brighton $215,000 2.42 years
    Hobart houses highest Hobart $570,000 6.33 years
    Hobart units lowest Glenorchy $195,000 2.17 years
    Hobart units highest Hobart $195,000 3.92 years
    Canberra houses lowest Holt $410,500 3.67 years
    Canberra houses highest Kambah $475,000 4.25 years
    Canberra units lowest Curtin $235,000 2.08 years
    Canberra units highest Watson $315,000 2.83 years
    Darwin houses lowest Berrimah $281,000 2.42 years
    Darwin houses highest Tiwi $455,000 3.92 years
    Darwin units lowest Nightcliff $200,000 1.75 years
    Darwin units highest Larrakeyah $440,000 3.75 years
    *Amount of years needed to save a 20% deposit

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Setting a realistic time frame to build up a deposit and doing thorough research on the market, will help ease any stress.

Ways to fast-track your deposit

  1. Whilst saving for the long term can sound daunting, it may be easier to think in short-term blocks. If dipping into your wages is the only way to go, track your progress by reviewing your finances every three months and set yourself mini goals. To keep motivated you could also reward yourself for achieving your goals with a reasonable treat such as a special meal out. Follow these tips below.

  2. Open a high interest savings account

    Rather than just having one sole everyday account, it may be smarter to open a separate high interest savings account where you can save money specifically for a deposit and accrue a higher interest rate.

  3. Trim your budget

    You’ve heard this one countless times, but it’s imperative you slash away at any unnecessary expenses wherever you can. Aim to cut some things out completely such as a café lunch every work day. Also downgrade as much as possible – drink cheaper wine, have a meat-free day each week, buy less clothes and holiday closer to home instead of the opposite hemisphere. Every bit will count.

  4. Pay off your debts

    If you still have credit card debt or any other type of loan debt hanging over your head, it’s vital that you clear it as soon as possible. Getting ahead with savings will be very difficult if you are accruing interest penalties elsewhere.

  5. Sell your stuff

    Get serious about decluttering and put everything you don’t need on Ebay or Gumtree.

  6. Move in with your parents

    This one won’t be easy, but many people have done this in order to reduce their expenses and eliminate high rents for a certain period.

  7. Ask for a rental reduction

    If living with your parents is out of the question, then it could be worth asking your landlord nicely for a rental reduction in exchange for you being a long-term tenant. Otherwise you could also consider moving in with flatmates or a partner to reduce the cost.

1Source: Domain 2018 First Home Buyers Report. Deposit saving time is calculated by comparing salary and entry-level price. With the average age to purchase a first home being 34, the report is based on the average income for couples between 25-34 years old in each capital city. ABS wage data is used to provide an estimate of current salary by factoring wage price growth using the ABS Wage Price Index (WPI). The time required to save a deposit is based on a dual income, with each person saving 20 per cent of their post-tax income monthly that is deposited in a standard online savings account (interest earned is taxed at the individuals’ tax rate).
  • Use a calculator to get an estimate of how much you can borrow. Try one here.

  • See if you qualify. To get a more accurate idea of how much you can borrow with State Custodians,
    click here.

  • Call our Lending Specialists and they can do the calculation for you over the phone plus answer any questions you have at the time. Talk to us on 13 72 62.