First home buyers are now saving less than half of what they were a year ago as the rising cost of living continues to impact their ability to enter the property market.
According to new research from Canstar, first home buyers are now saving just $724 per month towards their deposit, which is down significantly from $1,605 in 2023 and $1,417 in 2022.
At the current rate of savings, it would take a single person approximately 10 years to save a 10 per cent deposit for an average-priced unit.
The research found that rising household costs were the main impediment to saving, with bills and expenses (56 per cent) and rent (46 per cent) being the biggest hurdles.
Surprisingly, nearly half of all potential first home buyers are planning to purchase alone, while 58 per cent aren’t receiving any financial assistance from family members.
Canstar Data Insights Director, Sally Tindall said the situation was concerning but not unexpected.
“The rising cost of everyday essentials impacts us all, but it’s making it especially difficult for first home buyers trying to get ahead,” Ms Tindall said.
“Add on top of this rising property prices, rising rates and rising rents and it’s incredible to think 10,000 first home buyers are making it into the market each month.”
She said that while there are ways to speed up savings, many buyers might need to consider alternative pathways to enter the market.
“If that ever-elusive first rung of the property ladder keeps slipping out of reach, it could be time to look for a different way up,” she said.
“Consider shifting the goal posts closer by looking for a smaller property, looking further afield or taking that first step as an investor.”
“Some first home buyers aren’t willing to consider an investment property as their first purchase as it can exclude them from stamp duty concessions and lenders mortgage insurance waivers.
“However, if you can’t get a foothold into the market as an owner-occupier, it’s worth considering it as an alternative, particularly if you can live rent free in the family home.”
