Victorian FHBs hampered by buoyant housing market
First home buyers in Victoria have seen the biggest increase in the time needed to save for a deposit for a median priced house across all of Australia, according to a new report by Bankwest.
Victorian first time buyers (FTBs) are having to save for seven months longer than they did last year, the biggest increase in the country, thanks to a buoyant property market in the state.
FTBs have to save for 5.4 years to save the necessary $126,187 needed for a deposit, up from 4.9 years last year and well above the 4.6 year national average, said the 2017 Bankwest First Time Buyers Report.
Despite this shows, first time buyers are not being put off from trying to get their foot on the housing ladder with 26,369 first time purchases in the year to June 2017 (roughly stable YoY).
Furthermore, ABS data shows the number of FTBs buying in the year to August 2017 rose by 3% to 27,758 (accounting for 15.1% of all homes purchased in the same period).
Victoria’s FTBs have been responding to a number of factors, according to Bankwest general manager Personal & Small Business Banking, Donna Dalby.
“Victorian house prices rose by 14.0% in the 12 months to August 2017 but also in 2017 we saw the introduction of stamp duty discounts for Victorian first time buyers on properties up to $750,000,” she said.
“While Victorian wages only grew by 2% this stamp duty discount will have encouraged first time buyers into the market. There were approximately 3,162 FTBs in Victoria in the month of August 2017 alone, the highest number since December 2009.”
In Melbourne, it takes more than four years for FTBs to save for a deposit in every local government area (LGA) in the city - the first time in the history of the report. Two in three (67.7%) LGAs require FTBs to save for more than six years, up from 54.8% in 2016.
FTB couples in Melbourne will need an average of 6.4 years to save the $153, 008 deposit needed on a median priced house, eight months longer than in 2016 (5.7 years) and 1.5 years above the capital city average of 4.9 years.
Melbourne’s Boroondara area is the least accessible as FTBs there will require an average of 15 years to save a median deposit of $436,738.
The saving time here rose by 1.4 years year onn year, driven by a 12.8%1 increase in Boroondara median house prices.
A four-bedroom house at 50 Lake Road, Gannawarra (picture above) is on the market for $350,000. It was previously listed in 2013 for $355,000.