When you were a kid, owning a house is one of those things you just kind of expected to happen when you grew up. Granted, lots of things were simpler back then but, on the whole, it wasn’t something we were taught to think of as ‘impossible’.
Now, however, our perspectives have somewhat changed. In fact, many describe the prospect of buying a house as utterly unobtainable for two main reasons: house prices are ridiculously high and, in the meantime, we’re spending all our income on rent, making it particularly difficult to save for even a deposit.
But despite the daunting reality of the Australian property market – did you know that ALL FIVE of our major cities ranked in the world’s 20 least affordable housing markets? – new research by realestate.com.au found that a whopping 80% of us still want to own a home one day.
The same report also found that only 40% would be prepared to move back home to save money for things like a house deposit. Which brings us to our next question, how much do you actually need to have saved up before you can apply for a home loan?
In Australia, the general rule is that you should aim to save 20% of the total property price to use as a deposit.
While some financial institutions accept lower percentage deposits, if your deposit is less than 20%, you’ll be required to pay additional charges like Lenders Mortgage Insurance. With that in mind, you should aim to save at least the recommended amount – that way you will also have to less interest to pay in the long run.
Now to the nitty-gritty stuff.
Perhaps, not surprisingly, Sydney comes in with the most expensive deposit prices (as house and unit prices are generally higher), followed by Melbourne and Canberra.
As for the most affordable cities to take out a deposit, Adelaide is the cheapest, with Darwin found to be the second most affordable.
Scroll down for a break down of the median property prices in each of the major Australian cities, along with a guide for what a housing deposit would look like.
Sydney
Median House Price: $960k
Deposit Estimate: $192k
Median Unit Price: $720k
Deposit Estimate: $144k
Melbourne
Median House Price: $715k
Deposit Estimate: $143k
Median Unit Price: $540k
Deposit Estimate: $108k
Brisbane
Median House Price: $526k
Deposit Estimate: $105.2k
Median Unit Price: $395k
Deposit Estimate: $79k
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Adelaide
Median House Price: $462k
Deposit Estimate: $92.4k
Median Unit Price: $335k
Deposit Estimate: $67k
Perth
Median House Price: $506k
Deposit Estimate: $101.2k
Median Unit Price: $380k
Deposit Estimate: $76k
Hobart
Median House Price: $506k
Deposit Estimate: $101.2k
Median Unit Price: $380k
Deposit Estimate: $76k
Darwin
Median House Price: $496k
Deposit Estimate: $992k
Median Unit Price: $360k
Deposit Estimate: $72k
Canberra
Median House Price: $668k
Deposit Estimate: $133.6k
Median Unit Price: $425k
Deposit Estimate: $85k
If this all sounds pretty achievable then WOWWW – you go, Glen Coco! But, before you dive into the deep end and apply for a home loan, it’s worth checking your state’s policy on first home buyers, as you might find you’re eligible for a First Home Buyers grant.
If, however, this all works out a lot exxier than you thought, perhaps it’s worth familiarising yourself with the surprising benefits of renting forever.
Prices are calculated as a median for realestate.com.au property listings over the last 12 months for the period ending January 2019.
