Revealed: How long it takes to save a home deposit

17 hours ago 2

Finder’s head of consumer research Graham Cooke says the time it takes to save a deposit is shocking. Picture: Supplied

Hobart singles need up to 16 years to save a deposit for a $400,000 house, new research has revealed.

Finder data shows people working in creative arts, communications, nursing, and veterinary science will take the longest time to pull together a deposit for homes in the capital’s most affordable end of the market, including suburbs like Brighton, Clarendon Vale, Herdsmans Cove, and Primrose Sands.

Tradies fared better, with roof tilers, carpenters, plumbers, plasterers and bricklayers needing nine to 10 years for the same deposit.

For a median-priced Hobart house, singles were looking at between 19 and 30 years, depending on their career choice.

Finder head of consumer research, Graham Cooke, said it was “shocking” how long it would take people to save a 20 per cent deposit.

He noted that prices were climbing in most areas at a faster rate than wages and those saving home deposits were struggling to keep up.

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Graham Cooke.

“People think rates are the be-all and end-all — and we hear so much about prices — but what’s less discussed is the deposit,” Mr Cooke said.

“People don’t realise just how long it now takes to save a deposit to get on the bottom rung of the property ladder.

“That bottom rung is getting higher and higher.”

The federal government’s expanded First Home Guarantee came into effect this week, allowing people to buy with a deposit as low as 5 per cent while also avoiding mortgage insurance.

Income caps have been scrapped, and price limits raised — $700,000 for Hobart, up from $600,000 — to help more people get a foot on the ladder.

Hobart’s median house price is $724,000 and for units it is $575,000, per PropTrack figures.

Mr Cooke was doubtful that the scheme would radically improve market accessibility for new buyers.

“You could get help with the deposit, but you are borrowing more. You could be in a worse position,” he said.

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Mr Cooke said the findings showed blue collar workers were in the best position when it came to buying a home as apprenticeship pay meant they could start saving faster than white collar workers, who often only started to get an income above minimum wage after finishing university.

Blue collar jobs also looked more secure in an era where companies were exploring the potential role of AI, Mr Cooke said.

“People starting their careers are right to be concerned about the impact of AI on employment,” he said.

“It is likely entry level positions will be most at risk.

“Trades pay pretty well. You get four years of pay for an apprenticeship … and you can’t get AI to fix your toilet.”

Derwent Finance director Rhianna Farnan.

Derwent Finance director Rhianna Farnan said when banks and lenders assess a loan application, career choice isn’t the main deciding factor.

Ms Farnan said they’re focused on stability, things like whether the applicant is in secure, ongoing employment, their income level, savings history, and ability to manage debts.

“While certain industries are seen as more stable than others, what lenders are really looking for is evidence you can service the loan,” she said.

“It’s not about how much you earn in isolation, there’s no “minimum income” to qualify for a loan.

“What matters is the relationship between your income and the size of the loan you’re applying for.”