MEDIA RELEASE
EMBARGOED UNTIL 12.01AM WEDNESDAY AUGUST 17, 2011
QLD first time buyers save for 3.9yrs to get on property ladder
Bankwest research released today has found that although the property market has softened
somewhat over the past year this has had little impact on housing affordability for first time
buyers across Queensland.
The latest report in the Bankwest Financial Indicator Series – the third annual “First Time
Buyer Deposit Report” shows that the average time it takes a first time buyer couple to save a
house deposit in Queensland is 3.9 years*.
This figure represents a modest improvement from last year (4.3 years) but is slightly higher
than five years ago when it took first home buyers an average of 3.7 years to save a deposit
to get onto the property ladder.
Bankwest Senior Analyst, Tim Crawford said, “Over the past financial year there were 15,746
first home buyers across Queensland which is 36% lower than the previous year.”
“The fact that first time buyers need to save for long periods for a deposit, especially in
Brisbane, directly contributes to this drop in new buyers entering the property market.”
In Brisbane, a first time buyer couple would need to save for 4.0 years to raise a 20% deposit,
down from a 4.5 year savings period in June 2010 but up from a 3.7 year savings period in
June 2006.
Based on a 20% deposit first home buyers in Brisbane would need to save an average of
$81,200 which is a 30% rise compared to five years ago when it was $62,500.
Across capital cities, first time buyers in Brisbane, Adelaide and Hobart have to save for the
shortest period of time (all 4.0 years) to get a foothold on the property ladder. First time
buyers in Sydney have to save for the longest period of time (5.7 years), followed by
Melbourne (5.4 years).
“Over the past year, all capital cities have seen a modest improvement in the time it takes a
first home buyer to purchase their first property, led by Brisbane,” Mr Crawford said.
“However despite this, over the past five years house prices in Brisbane have risen by 27%
compared with a 21% increase in wages, which points to a deterioration in housing
affordability.”
In over a third (38%) of Local Government Areas (LGAs) across Brisbane it would take a first
time buyer couple more than 4.0 years to save a 20% deposit for the median house price.
This contrasts with the majority (91%) of LGAs in regional Queensland where it would take
less than four years for couples to save a 20% house deposit.
In regional Queensland it would take an average of 2.7 years to save a 20% house deposit.
“This means that if first time buyers started saving now for the median Brisbane house price
they would be in a position to purchase their first home in mid 2015, whereas in regional
Queensland this would be early 2014.”
*based on a 25-34 yr old couple saving 20% of their combined pre-tax income annually
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The increased cost of living and the reduction in the First Home Owner Grant, coupled with
the general sentiment of first time buyers not wanting to take out substantial loans in the
current economic environment, all contribute to the slump in the first home buyer market.
“For the property market to prosper there needs to be a consistent number of first time buyers
as historically this has been the catalyst for growth in the sector.” Mr Crawford said. Other findings:
• It would take a first time buyer couple 5.4yrs to save a 20% deposit for a house in
Noosa, the longest savings times of any LGA in Queensland.
• It would take a first time buyer couple 0.5 yrs to save a 20% deposit for a house in
Paroo, the shortest savings period in Queensland.
• In Brisbane and surrounds, the shortest saving period for first time buyers is in
Ipswich, 2.7 years for a house deposit.
• In Brisbane, it would take longer than 4 yrs to save a 20% deposit for the median
house in 38% of LGAs (3 out of 8 LGAs). This compares to 50% of LGAs in 2010 (4
out of 8) and 13% of LGAs in in June 2006 (1 out of 8).
• Saving a 20% deposit for the median unit in Brisbane would take a first time buyer
couple 3.3 yrs. This compares to 3.5 yrs in June 2010 and 2.9 years in June 2006.
Data for the First Time Buyer Deposit Report is derived from the Australian Bureau of
Statistics Census, the ABS Wage Price index with house prices from Residex.
Bankwest’s researchers analysed local incomes of potential first time buyers – measured by
census data on incomes of 25-34 year olds – along with local house and unit prices.
A full list of results for all 544 LGAs across Australia is available in the Bankwest First Time
Buyer Report 2011 at www.bankwest.com.au.
- ENDS
Note: Tables can be found on the following page and high resolution Affordability Maps are
available upon request.
For more information contact:
Tatiana Day
Bankwest National Media Manager
0467 717 209
[email protected]
Kate Lord
Bankwest Media Manager
0467 736 662
[email protected]
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Table 1- First Time Buyer Deposit savings times by state
Yrs to save
house deposit
(June 2011)
Yrs to save
house deposit
(June 2010)
Yrs to save
house deposit
(June 2006)
Change
over 1 yr
Change
over 5 yrs
Savings needed
for 20% House
Deposit $s
(June 2011)
Northern Territory
4.6
4.8
3.4
-0.2
1.2
86,900
Victoria
4.4
4.4
3.4
0.0
1.0
86,300
NSW
4.3
4.5
4.4
-0.2
-0.1
88,700
ACT
4.2
4.2
3.5
0.0
0.7
101,100
Western Australia
4.0
4.3
4.6
-0.3
-0.6
83,100
Queensland
3.9
4.3
3.7
-0.3
0.2
74,700
South Australia
3.7
3.7
3.2
0.0
0.5
66,200
Tasmania
3.4
3.4
3.2
-0.1
0.2
54,700
Australia
4.1
4.3
3.8
-0.2
0.3
80,500
Table 2- First Time Buyer Deposit savings times by capital city
Yrs to save
house deposit
(June 2011)
Yrs to save
house deposit
(June 2010)
Yrs to save
house deposit
(June 2006)
Change
over 1 yr
Change
over 5 yrs
Savings needed
for 20% House
Deposit $s
(June 2011)
Sydney
5.7
6.0
5.3
-0.3
0.4
127,700
Melbourne
5.4
5.5
3.9
0.0
1.5
111,700
Darwin
4.2
4.5
3.3
-0.2
1.0
93,100
Perth
4.2
4.5
4.9
-0.3
-0.7
88,000
Canberra
4.2
4.2
3.5
0.0
0.7
101,100
Brisbane
4.0
4.5
3.7
-0.4
0.3
81,200
Hobart
4.0
4.1
3.7
0.0
0.3
70,100
Adelaide
4.0
4.1
3.4
0.0
0.6
73,600
Capital city average
4.5
4.6
4.0
-0.2
0.5
93,313
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Table 3 - LGAs where it takes longest for First Time Buyers to save a house deposit in
Qld
Yrs to save
house
deposit
(June 2011)
Savings
needed for
20% House
Deposit $s
(June 2011)
LGA
Region
State
Noosa
Sunshine Coast
Qld
5.4
95,100
Maroochy
Sunshine Coast
Qld
4.8
84,400
Brisbane
Brisbane
Qld
4.8
98,300
Caloundra
Sunshine Coast
Qld
4.8
83,100
Gold Coast
Gold Coast
Qld
4.8
88,100
Crows Nest
Darling Downs
Qld
4.5
76,100
Woocoo
Wide Bay-Burnett
Qld
4.3
67,900
Miriam Vale
Wide Bay-Burnett
Qld
4.3
67,100
Beaudesert
Brisbane
Qld
4.2
85,500
Redland
Brisbane
Qld
4.1
82,600
Table 4- LGAs where it takes the least time for First Time Buyers to save a house deposit
in Qld
Yrs to save
house
deposit
(June 2011)
Savings
needed for
20% House
Deposit $s
(June 2011)
LGA
Region
State
Paroo
South West
Qld
0.5
8,800
Quilpie
South West
Qld
0.7
11,300
Flinders
North West
Qld
0.8
18,100
Richmond
North West
Qld
1.0
20,900
Winton
Central West
Qld
1.0
17,500
McKinlay
North West
Qld
1.1
23,100
Tambo
Central West
Qld
1.1
18,800
Eidsvold
Wide Bay-Burnett
Qld
1.2
17,200
Bendemere
South West
Qld
1.2
20,700
Booringa
South West
Qld
1.2
20,900
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Table 5 - Savings periods for a house deposit for First Time Buyers by LGA in Brisbane
Savings
needed for
20% House
Deposit
(June 2011)
LGA
Region
State
Yrs to save
house
deposit
(June 2011)
Ipswich Brisbane Qld 2.7 53,000 Logan Brisbane Qld 3.2 63,200 Caboolture Brisbane Qld 3.3 65,000 Redcliffe Brisbane Qld 3.5 69,600 Pine Rivers Brisbane Qld 3.8 76,900 Redland Brisbane Qld 4.1 82,600 Beaudesert Brisbane Qld 4.2 85,500 Brisbane LGA Brisbane Qld 4.8 98,300 Methodology
The time taken for first time buyers to save a deposit has been calculated by comparing house and unit prices by
local government area with regional income data for potential first time buyers (represented by 25-34 year olds).
Calculations are based on first time buyers saving 20% of the median house or unit price, including available first
home owners’ grants.
Deposit savings times have been calculated on the basis of a first time buyer couple setting aside 20% of their
combined pre-tax income annually. The calculation assumes the savings are deposited in an online savings
account each month and earn interest on this basis. Interest earned is assumed to be taxed at an individual’s
marginal tax rate.
Income levels for 25-34 year olds have been used as a proxy for potential first time buyer incomes. Income data
has been sourced at a statistical district level.
Average income data by statistical district has been sourced from the Australian Bureau of Statistics (ABS) census
2006. Income levels for 2011 and 2010 have been estimated using the increase in the ABS wage price index over
the subsequent period.
Median house and unit prices have been sourced from Residex and are for the years June 2006, June 2010 and
June 2011.
Data for industry average online savings account rates has been sourced from the RBA.
Data on the number of first-time buyers has been sourced from the ABS Housing Finance series.
About Bankwest:
Bankwest provides personal and business banking solutions for more than one million retail and business customers across
Australia. Bankwest customers enjoy access to an extensive network of stores and business centres, direct and third party
distribution channels, agencies and electronic banking facilities, as well as 24-hour telephone and internet banking. In 2010,
Bankwest was chosen as the AFR Smart Investor Blue Ribbon Awards 2010 Bank of the Year. Bankwest is a wholly owned
subsidiary of the Commonwealth Bank of Australia Group.
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