The Australian housing market is currently under extreme pressure; with increased rents and low vacancy rates, this market is expected to witness a shortfall of 257,000 homes over the next five years. This has thus placed more pressure on first-time homebuyers and made it increasingly difficult for them to save for their first property. A report from Mortgage Brokers AU presented the most recent reports, and it showed that there was a 35% increase in rent prices since 2020, which adds more complications to one’s road to purchasing their first home.

Based on these challenges, Mortgage Brokers AU researched and analysed the capital cities of Australia to come up with areas where saving a home deposit would be the most realistic. The factors considered in this research included rental prices, average income, savings, and living expenses. According to their research, Perth will best meet the requirements of saving for a deposit among first home buyers.

Perth: Australia’s number one place to save the house deposit Perth has come out on top, offering an outstanding affordability score of 8.56 from 10 points. It has become easier for Perth residents to save for a house deposit for a number of reasons.

Probably one of the most striking features about Perth is that $2,108 is the higher average weekly salary. Residents therefore have a higher proportion to save. That too, rent in Perth uses up only 30.85% of that income; it is much lower when compared with any other major city in Australia. Yes, rents are going up, but with Perth wages, the difference feeds the pocket better.

Another area where Perth offers hope for first home buyers is in living costs. Public transport is relatively affordable, at about $160 a month. This affordability allows Perth residents to save a little over $82 monthly, equivalent to 12% more savings than the usual possible savings for those dwelling in Melbourne. These amounts of savings can add up significantly over time and put first home buyers very close to achieving their goal of homeownership.

The Perth housing market remains strong as well; nearly 40.5% of the population have mortgages. Such a high mortgage level indicates a community of homeowners and can be quite encouraging for those entering into the market.

First home buyers may also find opportunities in Melbourne and Hobart. Although they lag much behind Perth, Melbourne and Hobart, however, also constitute good alternatives.

Melbourne

Melbourne is considered the second most affordable city, with a score of 7.75 out of 10. It is known for its vibrant culture and lifestyle that offers many attractions to city dwellers. The rent in Melbourne is but only marginally lower from Perth’s $580 a month; however, the average salary they earn per week is less, at about $1,858.

This translates into a rent-to-income ratio of 31.2%, that in turn places a significant amount of the income of apartment renters to rent. A great factor notwithstanding these is the side income opportunities and dynamic job market Melbourne provides for its residents, which enables some $73 savings per month.

Melbourne’s varied neighbourhoods and cultural opportunities continue to attract newcomers, therefore fostering a community that most consider attractive. Though saving is slightly harder than in Perth, it is still quite possible for first home buyers.

Hobart

Ranking third, Hobart has an affordability score at 7.38 out of 10. Usually known for harbour views and a rather historical part of the city, Hobart has a very different way of life. As its average rent is the lowest on the list at $540 per month, its average weekly salary is also only at $1,670.

With a lesser average income, Hobart also indulges in low costs for public transport, averaging only $86.23 a month and proving easier to save for the residents. Monthly savings in Hobart come about around $65 although on the small side, which can go a long way in the payment of that future home deposit.

Hobart’s appeal is in the beautiful scenery and the relaxed lifestyle provided to its citizens who want to break free from the busy cities trend.

Brisbane: The Hardest City for First Home Buyers

On the other side of the table, Brisbane came in with the lowest score at just 5.77 out of 10 as the most difficult city to save to buy a home. While a $630 average monthly rent is relatively low, this amount stretches 34.15% across the average income.

Brisbane also pays a premium for public transport, costing an average of $197.35 per month. This makes the level of savings these residents can make much lower, and they only manage to save about $72 a month, making it the toughest for potential home buyers.

Despite all these disadvantages, Brisbane also has its positives such as comfortable warmth in the climate and a lively lifestyle. For those who can overcome financial difficulties associated with the city, Perth may offer a loving community with numerous entertainments.

How to become homeowners?

People in Perth have higher average salaries than residents of other cities, and their rent-to-income ratio is low, thus enabling them to save more money than elsewhere.

However, Melbourne and Hobart also work, but these two bring in their own troubles. Brisbane is more lively and energetic but brings out the most hostile challenge towards saving.

For first-time home buyers, strategy in saving is the key. Budgeting properly, eliminating unnecessary expenses, or finding another source of income enhances your potential to save.

There will come a time when you will be ready to move forward with your homeownership journey. ASK Financials will do the job for you. Contact them today to realise your dream home by seeking personalised guidance and assistance in your process.

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