A 21-year-old Sydney tradie said he’d love to buy his first home before he turns 30, but admitted it was ‘unattainable’. (Source: TikTok/@coposit_street)
A Sydney tradie says it has now become “unattainable” to buy a home while still in your twenties. The average age of first-home buyers in Australia continues to climb as high property prices blow out the time needed to save up a deposit.
The 21-year-old was stopped in the street by property app Coposit, which has gone viral online for asking people to reveal personal details about their savings and property plans. The demolition worker revealed he had $15,000 in savings but little hope to turn it into a deposit any time soon.
While he’d love to buy his first home before he turns 30, he lamented that dream was becoming “too hard” with the current cost of living in the country.
“With everything going up, it just doesn’t look like it’s attainable,” he said.
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The young worker said he was finding the cost of living “outrageous” at the moment, especially for someone his age.
“Too hard. Buying a house just seems unattainable,” he said.
While confessing he spent too much on coffee, buying two or three a day, he said his biggest financial risk was buying a drift car, which had “ruined” him.
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Saving up for a deposit has long been the biggest obstacle to home ownership.
In Sydney, Domain found households face timelines of 10 years to save up a 20 per cent deposit for a $1.5 million home. In Brisbane and Melbourne, households need nearly eight years for $1 million and $950,000 homes, respectively.
The reality is most Australians do not buy their first property before they turn 30. The average age of a first-home buyer is now around 36 years old, according to UNSW.
The home ownership rate of first-home buyers born in the late 1980s has significantly dropped compared to previous decades.
AHURI research found that over the last 30 years, home ownership rates for those aged 30 to 34 had dropped from 65 per cent for people born in the mid to late 1950s to only 45 per cent for those born in the late 1980s.
“This fall in ownership rate has happened as house prices have nearly tripled, indicating that increasing house prices and falling affordability are associated with a delay in housing market entry for Australian households,” Professor Stephen Whelan from the University of Sydney said.
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Home ownership rates for those aged to 30 to 34 have been dropping over the last few decades. (Source: Getty)
Back in the early 1980s, the house price to income ratio was 2.6. Fast forward to the early 2010s and it has more than doubled to 7.0.
As expected, banks have also found the average age of those taking out first-home buyer loans is on the rise.
Recent data from Westpac found one in five first-home buyer loans issued nationally over the past year went to those aged over 40.
This is consistent with the other major banks, with the average buyer across lenders now 34 years old, a couple and taking out a loan of $486,000. More often than not, they are also supported by some sort of government subsidy.
The government’s First Home Guarantee Scheme was expanded last week and is aimed at getting people into the housing market sooner.
All eligible first-home buyers are now able to buy with a 5 per cent deposit, without paying the lenders’ mortgage insurance that usually applies for deposits under 20 per cent.
The scheme now has no income caps or limits on the number of places available, with property price caps also increased.
Domain found the change means it will now take a Sydney household less than three years to save up a 5 per cent deposit, while Melbourne, Brisbane and Adelaide households can expect to save for just over two years.
Domain chief of research and economics Dr Nicole Powell said the expanded scheme would be a “game-changer” and help buyers get into the market sooner.
“But it’s not a magic fix,” she warned. “Buyers will still face bigger mortgages and the risks that come with rising interest rates and potential property price drops.
“We also expect a fresh wave of demand, which could ramp up competition and push prices higher in more affordable areas, especially if supply doesn’t keep pace.”
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