Adelaide is the only mainland capital city where first home buyers can get into the housing market with a deposit under $100,000.
A new national report from Bankwest finds South Australia is one of Australia’s most accessible states for first time buyers (FTBs).
Despite the median house price increasing by 3.8 percent in the 12 months to June 2016, South Australia requires the lowest house deposits in mainland Australia, according to the 2016 Bankwest Financial Indicator Series’ First Time Buyers Deposit Report.
The average FTB couple in South Australia needs to save for 3.6 years to save the $78,700 needed for a 20 per cent deposit on a median priced home. That’s a slight increase on last year, but still well below the national average of 4.4 years.
Bankwest Executive General Manager Retail Andrew Whitechurch said the news was positive for FTBs seeking to buy in the state’s capital as well.
“It’s clear South Australian first home buyers face a more manageable task than those elsewhere in Australia, particularly in NSW and Victoria,” he said.
“For people who want to buy in the city things are more challenging but even though around 70 per cent of Adelaide suburbs require first home buyers to save for more than four years, the time required is much less extreme than in Sydney and Melbourne.”
In Adelaide, an average FTB couple needs $88,500 for a deposit on a median priced house, up from $78,900 in 2015. The time it takes to save a deposit has increased to 4 years, up from 3.6 in 2015 but still favourable when compared against the national average of 4.9 years for capital cities.
Almost a quarter of South Australian local government areas (LGAs) require less than two years for a FTB couple to save a deposit on a median priced house. All of these areas are outside Adelaide.
“Walkerville is Adelaide’s least accessible suburb for first home buyers and it would take 7.4 years for a couple to save a deposit to buy there,” Mr Whitechurch said.
“Yes, that’s a long time, but to put it in context, in Sydney’s Strathfield you’re looking at 17.9 years.”
Mr Whitechurch said the eighth annual First Time Buyers Report had been produced as part of Bankwest’s ongoing commitment to offer insights on economic data, trends and issues of value to its customers, businesses, communities and policy makers.
“Bankwest is committed to helping customers and local businesses achieve what matters, contributing to the development of our communities and being a positive voice in the debate on the future of the economy.
“We hope this annual report, which provides a snapshot of the state’s housing market in 2016, demonstrates this,” he said.
Nationally, the report shows Australia’s median house value grew 3.9 per cent to $518,0001 in the 12 months to June 2016. As a result, Australian couples will have to save for an average of 4.4 years to accumulate the $103,600 needed for a 20 per cent house deposit on a median priced house.
This is two months longer than in 2015 (4.2 years) and almost $4,000 more than the $99,700 deposit required last year.
In capital cities, it takes the average FTB couple 4.9 years to save for a house, up from 4.5 years last year.
The quickest route into South Australia’s housing market is Coober Pedy, where it takes an average FTB couple just 0.9 years to save a $17,500 deposit on a median priced house.
Peterborough (1 year to save $16,700) and Southern Mallee (1.2 years for $19,300) are second and third.
At the other end of the market, South Australia’s top 10 least accessible suburbs are all in Adelaide. Walkerville is number one (7.4 years to save $172,500), followed by Burnside (6.8 years for $169,300) and Unley (6.7 years for $165,400).
Key findings of the Bankwest Financial Indicator Series’ First Time Buyers Deposit Report 2016:
- Fewer FTBs entered the market in the last 12 months, impacted by the removal of the First Home Owners’ Grant for established homes by some state governments, coupled with rising property prices. The number of FTBs declined to 90,939 in the year to June 2016, down from 94,517 the previous 12 months.
- Of the top 10 LGAs nationally where it takes longest for FTBs to save a house deposit, eight are in Sydney, one is in Perth (Peppermint Grove) and one in Melbourne (Boroondara).
- Of the top 10 LGAs with the shortest saving times, three are in Queensland, three in NSW, two in SA (Coober Pedy and Peterborough), one in WA and one in Tasmania.
- Regional and rural LGAs offer the quickest pathway to a first home. None of the 10 South Australian LGAs where it takes the least time for an FTB couple to save a house deposit have experienced an increase in required savings time in the 12 months to June 2016.
- The market for units is more accessible for FTBs than the housing market. Across Adelaide’s LGAs the required savings time for a median priced unit has either remained steady or fallen since 2015 while the median unit value rose slightly by 0.2 per cent.
- Walkerville (3.4 years), Adelaide (3.4 years), and Norwood Payneham And St Peters (3.2 years) are the South Australian LGAs requiring the longest savings time to secure a unit deposit. Top 10 South Australian LGAs where it takes the most time for FTB couples to save a house deposit
|LGA Name||Years to save house deposit (June 2016)||Years to save house deposit (June 2015)||Years to save house deposit (June 2011)||Region||State||Savings needed for 20% house deposit (June 2016)|
|Norwood Payneham And St Peters||6.4||6.1||6.1||Adelaide||SA||$148,900|
Source: Bankwest First Time Buyer Deposit Report 2016
The Bankwest First Time Buyers Deposit Report 2016 tracks the time it would take for first time buyers to save a deposit in 465 local government areas (LGAs) across Australia over the five years to June 2016. The report quantifies how long it would take a first time buyer to save a 20% deposit based on local incomes and local house prices and the level of the First Home Owners Grant, where available, by state. Data has been sourced from the Australian Bureau of Statistics (ABS) 2011 Census, the ABS Wage Price Index, the Reserve Bank of Australia (RBA) and Residex.
Deposit savings times have been calculated on the basis of a first time buyer couple setting aside 20% of their combined pre-tax income annually. The calculation assumes the savings are deposited into an online savings account each month and earn interest on this basis.
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