Victorian first-home buyers are seeing a glimmer of hope as the time required to save for a home deposit decreases, PIPA reported.
According to PropTrack’s latest Housing Affordability Report, it now takes an average of six years to save for a $700,000 home, down from a peak of nearly seven years in 2021.
The slowdown in house prices and a potential interest rate cut early next year are expected to make homeownership more accessible in the coming months.
The state’s strong performance in new home construction and recent property tax changes have helped stall home prices, providing relief for potential buyers.
PropTrack senior economist Angus Moore (pictured above) credited Victoria’s proactive housing policies.
“Victoria has actually done a pretty good job of building homes across the past decade or so,” Moore said.
More than 610,000 homes were built in the state from 2014 to 2023, surpassing NSW and Queensland.
With the Reserve Bank of Australia potentially cutting rates as soon as February, housing affordability is projected to improve.
“If we continue to see income growth and interest rates ease, we’d hope to see affordability start to improve across Melbourne,” Moore said.
Households earning $120,000 per year can currently afford just 13% of Victorian homes, but that percentage is expected to increase with falling rates.
A separate report by Mortgage Broker ranked Melbourne as the second-best city in Australia to save for a home deposit, scoring 7.75 out of 10, just behind Perth. The ranking factors in rental costs, average incomes, and savings potential.
Simon Kuestenmacher of The Demographics Group believes Melbourne’s affordability will improve further as the city continues to expand, creating more affordable housing options.
Buyers advocate Cate Bakos emphasised that the Victorian market is currently more buyer-friendly than other capital cities, thanks to increased property listings and reduced demand.
“Buying conditions are a lot easier in Melbourne than in other capitals,” Bakos said, advising potential buyers to consider purchasing before the expected rate cut creates a surge in competition.
“Now is a good time to buy or start looking,” she said.
This sentiment was echoed by iCare Finance mortgage broker Bass Tawil, who is encouraging buyers to act within the next 6 to 12 months, PIPA reported.
Read more on realestate.com.au.
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