Saving for a deposit is one of the biggest obstacles first home buyers face when it comes to property ownership, Westpac’s Head of Consumer Banking, George Frazis, has said.
Frazis argued that the debate on housing affordability needs to step away from trying to get prices to drop and rather encourage lenders to provide help for first home buyers in order to save for that first, big payment.
“This whole notion that you want a system where house prices drop is flawed. It is over $7 trillion in terms of an asset class. If that loses value, it would destabilise the economy," Frazis told The Australian Financial Review.
According to Frazis, the property debate has disregarded the challenges young Aussies face when it comes to saving for a deposit, like high living costs and low wages.
"This is not about prices going down, this is about ensuring that those who find it difficult to raise a deposit have avenues into getting into home ownership."
"Home ownership is important for many reasons. It makes for better societies, communities are better off, it kind of equalises wealth. Young people who get a home do end up saving more.”
Given that the median housing price in Sydney is $1.17 million, first home buyers would need to save over $100,000 for a 10% house deposit. While the difficulty of saving for a home deposit rises, here are a few tips to think about:
- First Home Owners Grant: depending on your state and their requirements, this one-time payment could help you get closer to that 10% deposit.
- Proof of savings: many lenders will typically ask to see savings of at least 3 months, so you might want to think about setting up a high interest savings account where you can make direct deposits.
- Having a guarantor: saving for a deposit can feel like an endless tunnel, but there is a way to get some extra help by asking a family member to act as your guarantor.
- Getting a second job: if you find that you occasionally have some free time, finding some casual work in the hospitality industry can help you make some big donations to your savings account.
Almost ready to apply? Check out our Home Loan comparison tool to see the today’s offers.