Savings needed for first home deposit up 99% in 12 years

The data comes as Australia’s average property price has nearly doubled over the same period, rising from $489,900 in 2012 to $973,300 to 2024.

The jump has meant that buyers looking to avoid lender’s mortgage insurance with a 20 per cent deposit are now making a down payment of $194,660 for their first home, up from $97,980.

The research compiled by financial comparison platform Money.com.au showed that the increase has also meant that the average first home buyer loan has fallen from 73 per cent of the average property price to just 65 per cent.

Peter Drennan, research and data expert at Money.com.au, explained that market conditions have meant buyers are facing increasingly challenging choices when buying their first home.

“This tells us the average Australian first home buyer either needs to come up with a larger deposit or settle for a cheaper property – both of which are increasingly difficult to do in 2024,” he explained.

The research also shows that the first home buyer loan market has ballooned to 31 per cent of the total home loan market despite buyers facing higher house prices and interest rates.

It comes despite incomes not keeping up with house prices, prompting many to consider alternative financing agreements, Mansour Soltani, Money.com.au’s home loans expert, said.

“The subsequent jump in deposit requirements is forcing many first home buyers to either delay home ownership or find alternative financing methods, like borrowing from the bank of mum and dad, or using guarantors and government support,” Soltani explained.