While the strengthening property market might bring advantages to existing owners, it can make it more difficult for people to secure their first home loan. The sixth Bankwest First Time Buyer Deposit Report shows the amount needed to get onto the ladder is increasing, as property prices grow across the nation.
One of the main issues is that house price growth exceeding the increase many people have seen in their salaries over the past year. In light of this, first home buyers will now take an average of 4.1 years to save for a deposit on their first property, up from 3.9 years in 2013.
Bankwest Head of Specialist Banking Ian Rakhit said the low interest rate environment will work in buyers’ favour, but they still need to work on building that all-import deposit.
“The good news is there is still affordable housing available across the nation,” noted Mr Rakhit.
“Many first home buyers are starting to look further afield – for some, the more affordable housing offered by regional local government areas makes them a more attractive alternative compared to capital cities.”
Figures show there are currently 20 local government areas where first-time buyers would need to save 20 per cent of their income over the next decade to afford property. In the nation’s capitals, it would take an average of 3.3 years to save for a unit, which is 1.1 years faster than for a house.
The December CoreLogic RP Data Home Value Index showed capital city property values increased 7.9 per cent last year, with every city registering a rise in the final month of 2014 except Darwin and Canberra.
Sydney led the charge for annual price rises with an increase of 12.4 per cent. At the other end of the scale was Canberra, which was the only city to have recorded a yearly fall in its home values.
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