The time it takes for first-time home buyer couples to save for a 20 percent house deposit in the ACT is steadily growing, with it now taking four years and six months, three months longer than the previous financial year, according to new research from BankWest.
The ninth Bankwest First Time Buyer Report, which looks at the 2016-17 financial year, says this is the next largest year-on-year increase in saving time for FTB couples after Victoria and New South Wales, with ACT couples requiring the second largest deposit in the nation at $130,896, behind only NSW. Five years ago, the savings time in the ACT was 3.7 years.
But the highest wages in in the country ($137,865 for an FTB couple) are proving a mitigating factor when it comes to affordability, with the report saying that despite higher median property prices in the ACT relative to Victoria, saving time in the ACT has stayed below Victoria, where it is now 5.4 years (5.6 in Melbourne).
The ACT saving time equals the national average, which is the longest wait for FTB couples since the report’s inception. Nationwide, the average deposit required in June 2017 was $111,080.
The average wait in capital cities is three months longer at 4.9 years, with a deposit of $123,921 required. NSW couples require the longest saving time of all Australian states, with the average FTB couple needing six years to save a $148,281 deposit for their first house – the largest deposit amount nationally.
In Sydney, the average saving time is now 8.2 years, up from 7.5 years in 2016, with FTB couples requiring a deposit of $215,133. This is three years longer than in 2012 when it took just 5.2 years for the average couple to save a deposit on their first house.
The report says units provide a faster route to home ownership with the market retaining its affordability relative to the housing market. The savings time for a unit in the ACT is stable and 1.5 years faster at 3.1 years, and the required deposit much lower than for a house at $86,075.
Canberra is third after Darwin and Hobart as the most accessible capital city for buying a unit.
Nationwide, FTB couples will need to save for an average of 4.2 years for a deposit on a median-priced unit and in capital cities, the average is 3.6 years.
Sydney FTB couples will need to save for 5.9 years for a $152,529 deposit.
Despite the increase in savings time and deposits required, the report found the number of FTBs is rising for the first time in almost five years, with numbers up 10 percent in the ACT over this period.
“The number of FTBs across Australia remained steady in the year to June 2017, declining by just 0.4 percent during the period. However, this subtle decline did not reflect the experience in the Queensland and NT housing markets, with increases of 11.2 percent and 30.4 percent respectively,” the report said.
“Further to this, the latest figures from the ABS, which fall outside of our June-June reporting period, indicate an uptick in Australian FTBs in the year to August 2017. The number of FTBs increased by 5.6 percent to 94,135 in the 12 months to August – the first increase in nearly five years.”
Over the past five years, FTB numbers increased in NSW (5.1%), Victoria (3.0%), Queensland (15.0%), the ACT (10.0%) and the Northern Territory (24.2%), while they decreased in Tasmania (-4.3%) and remained relatively steady in WA (-0.2%) and SA (1.5%).
The nationwide growth in FTB numbers in the year to August 2017 was the largest increase since December 2012.
BankWest compiled the report based on data from property services provider CoreLogic, the Australian Bureau of Statistics (ABS), the 2011 and 2016 Census, and the Reserve Bank of Australia.