Has the Australian dream of home ownership become a nightmare?

As the challenges keep stacking up first home buyers are still searching for a light at the end of the tunnel.

Discussions about housing affordability are at the forefront for young Australians, prompting a reevaluation of the quintessential “Australian dream”.

For generations, the symbolism of success has been ownership of a modest house with a block of land, fit for raising a family and hosting a classic backyard BBQ. The scene promised a better life, becoming deeply ingrained in the nation’s identity to help shape modern Australia.

Decades of government policies and a hustle mindset for multiple housing investments have shifted the landscape. Many aspiring homeowners now find themselves struggling to secure stable and affordable housing, let alone enter the property market as an owner.

It all starts with a deposit

One of the biggest obstacles to homeownership among younger Australians is coming up with the initial deposit required to obtain a home loan. Typically, first-time buyers need to save up to 20% of the property’s purchase price to meet lending criteria—a daunting challenge amid increasing living costs and soaring rental prices. Recent reports indicate that saving for a 20% deposit now takes an average of 9.7 years.

Explore our Knowledge Centre below for more insights.

Knowledge Centre

How much is enough?

Based on a 6.24% variable home loan rate, and with a 20% deposit saved – the estimated household income to purchase an average-priced property in the following locations are:

City	Unit Deposit	House Deposit
Sydney, NSW	$148,600	$261,773
Melbourne, VIC	$119,077	$171,235
Brisbane, QLD	$99,001	$155,489
Canberra, ACT	$117,945	$186,980
Adelaide, SA	$90,538	$139,743
Perth, WA	$80,697	$116,125
Hobart, TAS	$102,347	$134,823
Darwin, NT	$77,744	$116,125

A helping hand goes a long way

Recent research conducted by UNSW Sydney published in the academic journal Buildings examined the homeownership path taken by first-home buyers to ultimately purchase their property. The findings were:

21% received a cash gift from their family to help fund the deposit
12% had parental guarantors
1 in 5 five first-time buyers were able to independently fund their initial 20% deposit.

What’s to come?

Looking ahead to 2024, housing affordability will likely be shaped by the trajectory of interest rates, housing demand and the state of the construction demand. Our experts predict that we may hopefully see a slight easing in interest rates toward the end of the year, which would ease serviceability costs but could also put upward pressure on home values.

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