Young couples hoping to buy in Sydney, Melbourne or Brisbane now have an easier time saving up for a mortgage deposit they did a year ago.
The Reserve Bank’s severe rate rises have reduced the ability of the banks to lend – reducing the choices for an average, full-time worker on a $94,000 salary.
But real estate group Domain calculated this had also slashed the time needed to save for a 20 per cent mortgage deposit for young couples buying together with two incomes.
‘Previously, rock-bottom interest rates greatly benefited mortgage holders, making it cheaper to borrow and repay a home loan. However, it was a key driver of price growth that lengthened the time to save a deposit,’ it said in its 2023 First Home Buyer Report.
‘This outlook has flipped as the RBA embarked on one of the most aggressive rate hiking cycles in history, escalating the cash rate to over a decade high.’
Real estate group Domain has calculated how rate rises have slashed the time needed to save for a 20 per cent mortgage deposit for young couples buying together with two incomes (pictured is a stock image)
Sydney’s median house price of $1.2million is still very expensive, with the U.S. Demographia think tank rating it as the world’s second most unaffordable city in the world after Hong Kong.
This is despite CoreLogic data showing a 14.7 per cent plunge during the past year, as the Reserve Bank of Australia raised interest rates 10 times to an 11-year high of 3.6 per cent.
This meant young couples, aged 25 to 34, had seen their time to save for a deposit in Sydney fall to six years and eight months, down from eight years and one month in April 2022 when the RBA cash rate was still at a record-low of 0.1 per cent.
But if a couple was willing to buy a house in St Marys, in Sydney’s west, that time to save for a deposit fell to five years and seven months.
Young couples, aged 25 to 34, had seen their time to save for a deposit in Sydney fall to six years and eight months, down from eight years and one month in April 2022 when the RBA cash rate was still at a record-low of 0.1 per cent (pictured are houses at Oran Park)
That was based on buying an entry-level house in a suburb where $735,110 was the mid-point.
In Melbourne, where the median house price was $897,222, the time to save for a deposit fell to five years and seven months, down from six years and six months, following an 11.2 per cent decline in the year to February.
If they bought in Sunbury, that dropped to four years and nine months in this western suburb where $640,640 was the median house price.
In Brisbane, where the median house price was $761,781, the time to save for a deposit has fallen to four years and five months, down from five years and two months, following an 8.6 per cent decline.
But in Ipswich, that falls to three years and nine months in a satellite city where the median house price was $509,321.
In Brisbane, where the median house price was $761,781, the time to save for a deposit has fallen to four years and five months, down from five years and two months, following an 8.6 per cent decline. But in Ipswich (Springfield, pictured), that falls to three years and nine months in a satellite city where the median house price was $509,321
In Adelaide, a couple would need four years and nine months to save for a mortgage deposit, virtually unchanged from four years and 10 months in April 2022, as the city’s median house price grew by 4.3 per cent to $694,653.
But if they bought in the Playford council area in Adelaide’s outer north, that fell to three years and five months, where $350,904 was the median house price in Davoren Park.
In Perth, a couple would need three years and seven months, almost unchanged from three years and nine months almost a year ago in a city where $587,274 was the median house price following 2.6 per cent annual growth.
But in Armadale, that fell to two years and 10 months in a suburb where $325,711 was the median price in the city’s outer south-east.
Source: | This article originally belongs to Dailymail.co.uk
