Property Buzz

Money & market

The dream of Australian home ownership fades as saving periods lengthen


In a stark indication that the Australian dream of home ownership is becoming increasingly out of reach, new research from PEXA has revealed a sobering reality for prospective buyers. The amount of time required to save for a home deposit has spiked alarmingly across the nation, with New South Wales, Victoria, and Queensland all seeing significant increases.

For New South Wales hopefuls, the saving period has nearly doubled, jumping from just over four to almost eight years, marking an increase of 83.2% from 2020. Victorians now face a five and a half year wait, up 64.2% from the three-year period two years prior, while Queenslanders find themselves needing to save for over five years—up from under four years in early 2021—a rise of 36.9%.

The figures reported for the FY23 period are staggering. In New South Wales, the median home deposit amount is now $119,969, which skyrockets to $145,000 in Sydney. Victoria’s median is slightly less, at $84,723, rising to $94,000 for Melbourne residents. Queensland’s median deposit is recorded at $78,143, with Brisbane’s a touch higher at $85,163.

Moreover, deposit-to-value ratios (DVRs) have reached a consistent 20% across these eastern states. However, for homes under $500,000, the DVRs are somewhat lower, resting between 16-18%, while those looking to enter the premium market—homes priced over $2 million—are facing daunting DVRs of 27-30%.

Mike Gill, PEXA’s Head of Research, delved into the implications of these figures. “With higher interest rates and rising property prices, the time to save for a deposit has increased significantly over the past few years. This has made the generational wealth gap more apparent, with younger demographics facing growing challenges to enter the property market,” he said.

The impact of tightened credit standards and higher interest rates has resulted in a noteworthy shift in the required loan-to-value ratios (LVRs) as well. “Our research found average loan-to-value ratios (LVR) peaked at around 83% at the end of 2020 during the onset of the COVID pandemic, meaning homebuyers needed to put down a deposit of only 17%. However, as lenders have tightened credit standards in response to increased interest rates, LVRs have trended downwards, increasing the deposits required. Coupled with high property prices, home buyers now need to work for at least two years longer to save for their home deposits,” Gill explained.

The comprehensive FY23 data also shows that the total value of deposits across the eastern states has hit an astounding $62.2 billion. Furthermore, the requirement for lenders mortgage insurance remains prevalent in over half of home purchases.


The ramifications of these shifts in the housing market crystallize the deeply rooted disparities in income, generational equity, and the lengthening timeline to home ownership in Australia. As industry experts and policymakers ponder over these new insights, efforts to devise strategies to alleviate the hurdles in the path of homeownership remain more critical than ever.

Previous post
Next post
Leave a Reply

Your email address will not be published. Required fields are marked *