Hot property market leaves first home buyers waiting

Growth in housing prices attributed to low interest rates and high levels of investor activity

Nationally, first time buyers are being forced to save for longer as the median value of houses outpaces salary growth. On average, Australian first time buyers will now take 4.1 years to save a 20 per cent deposit for a house, up from 3.9 years in 2013.

The sixth annual Bankwest First Time Buyer Deposit Report, the latest instalment from Bankwest’s Financial Indicator Series, has revealed the median value for houses has grown by 7.1 per cent to $469,000 in 2014 from $438,000 in 2013. The deposit needed to purchase a median priced property has reached $93,800, up from $87,600 in 2013.

Despite a significant increase in the median price of housing across Australia, wages amongst first time buyers have only grown by 2.6 per cent over the yeari, leaving first home saver incomes lagging behind rising house prices.

“This year’s report reveals an ongoing and increasing trend in the amount of time it takes to save for a first home in Australia,” said Ian Rakhit, Bankwest Head of Specialist Banking. “At the same time, those who are in a position to join the property ladder this year will do so at a time when the average price of houses is showing strong growth. If the current trend continues, these buyers may see an increase in the value of their property year-on-year.”