First-home buyers in 2024 face a daunting challenge, as data from Money.com.au shows that the average deposit needed has nearly doubled over the past 12 years.
When official property price records began in 2012, the average property price was $489,900, requiring a 10% deposit of $48,990. Today, the average home price has surged to $973,300, pushing the required 10% deposit to $97,330 — a 99% increase.
For buyers aiming to avoid lender’s mortgage insurance (LMI) with a 20% deposit, the figures are even more stark. In 2012, a 20% deposit would have been $97,980; today, it’s a steep $194,660.
While property prices have almost doubled, income growth has not kept pace. The average Australian salary increased from $70,158 in 2012 to $100,016 in 2024, reflecting only a 42% rise.
“The affordability gap for first-home buyers has widened dramatically, making saving for a deposit a near-impossible task,” said Mansour Soltani (pictured above left), home loans expert at Money.com.au.
As deposit requirements grow, first-time buyers are increasingly turning to alternatives such as borrowing from parents, using guarantors, or seeking government support.
“The jump in deposit requirements is forcing many first-home buyers to either delay homeownership or find alternative financing methods,” Soltani said.
The gap between loan sizes and property prices has widened significantly.
In 2012, the average first-home buyer (FHB) loan covered 73% of the property price, but in 2024, this figure has dropped to 65%.
“This tells us the average Australian first-home buyer either needs to come up with a larger deposit or settle for a cheaper property — both of which are increasingly difficult to do in 2024,” said Peter Drennan (pictured above right), research and data expert at Money.com.au.
Despite the rising costs, first-home buyer loans are expanding three times faster than the overall loan market, now making up 31% of all home loans.
In July, 10,937 new FHB loans were recorded, with Victoria and Queensland seeing the highest growth rates. Queensland experienced a 29% year-on-year increase, while Victoria saw a 24% monthly rise, demonstrating strong demand despite the financial hurdles, Money.com.au reported.
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