Saving for a home easier now than five years ago

article header

Average Australians face a better prospect of saving for a first home now compared to five years ago and especially two years ago, new research has shown.

That’s because while the cost of living has increased over the past five years, house prices are relatively unchanged compared to 2006 and incomes have continued to rise on average.

Damian Smith, chief executive of RateCity, says that despite gloomy news from world stock markets, first home buyers are in a better position to save for a deposit now than in 2006 and 2009.

“It got much harder towards the end of 2008, but since the global financial crisis affordability has improved, due to lower housing prices and continued income growth for most Australians,” he says.

The average Australian home now costs $417,500, which is $66,000 less than the average house price of 2009 and about the same as 2006 average prices, based on RP Data figures.

Income increasing

Median household income in Australia continues to rise at an average annual rate of over 7 percent since 2006, says Smith.

The median Australian household now takes home just under $77,000 as compared to just over $54,000 in 2006, according to Australian Bureau of Statistics and RateCity calculations.

“It’s certainly true that the rich have got a lot richer in Australia over the last few years; but middle Australia is doing better on the income side than some of the doom and gloom stories might suggest.

“The average household is now bringing in around $6000 more than they were two years ago and almost $23,000 more than in 2006,” he says.

Because of declining property prices and consistent income growth, Australians are in a better position to save for a typical 10 percent home loan deposit than two years ago, according to RateCity.

Australians are still buying

Obviously, these figures are averages and some Australians in some locations are finding it tougher.

Last month’s AMP NATSEM Income and Wealth Report showed that buying a home and paying off a mortgage is putting some Australians under considerable stress.

Craig Meller, financial services managing director at AMP, said in a statement that despite tough times Australians are continuing to buy property.

“Australians have not been deterred, with many entering the property market or preparing to do so every day. Some are downsizing or saving for longer, others are making sacrifices. In doing so, people are looking to secure their financial futures by holding tight to the Australian dream; to be a home owner,” he said at the time of the report’s release.

Smith says it’s important that the uncertainty of global share markets doesn’t infect potential buyers too much.

“There’s a lot more silver lining than people might think,” says Smith.


^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

Compare your product with the big 4 banks, or add more products to compare
As seen on