Potential home buyers are facing sky-high savings goals unimaginable even a decade ago, and looking for solutions to bridge the gap.
First home buyers are more reliant than ever on the bank of mum and dad and government schemes to buy a house, experts say, as the required deposit near-doubled in the past decade.
A Melbourne buyer would have needed a deposit of $119,000 in 2014, but would now need to find $206,000. “Wages have definitely gone up, but they have not doubled or tripled – you need them to triple because if they were doubled, they just meet the requirement,” Mardiasmo said.“It’s not just the deposit you need to consider, it’s building inspections, insurance and other fees.” The deposit figures also do not include stamp duty.
“It costs you more money – particularly if there are any changes to your interest rate,” she said. “It can also negatively impact you if you want to refinance.” However, she said more property options needed to be built, so people were not trying to buy a house with a relatively small windfall from selling a unit.“There needs to be more stepping stones for people between the unit market and the house market – we still have a missing middle,” Powell said.
Mardiasmo said the one upside of prices growing at this rate was that those who did manage to buy a property were likely to see their wealth grow quite quickly – even if it meant having to outlay a large deposit.
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