How are people really saving a house deposit?

The majority of Australians making the leap onto the property ladder are managing to save the required funds without any external help, Mortgage Choice has found.

As property prices continue to reach new highs across the country, getting into the market has become increasingly difficult.

Despite this, the latest Mortgage Choice Home Loan Report shows over three quarters of prospective homeowners across all age groups are managing to gather a deposit through personal savings alone.

A total 74% of those surveyed who are Generation Z (aged 18-28) said they funded their deposit through personal savings, alongside 70% of Millennials (those aged 29-44) and 69% of Generation X (ages 45-60).

Competition in the market is also strong, with submission data from Mortgage Choice showing an uplift in first home buyer activity in particular over the March quarter, following the Reserve Bank of Australia’s cash rate cut in February.

The number of loans rose 5.6% in the 12 months to March, while the value of loans also rose 12.3% year-on-year, the report showed.

While personal savings are the major winner when it comes to deposits, help is still on hand for many.

Generation Z were the age group found most likely to be borrowing funds to save for a house deposit, with over a quarter (29%) of survey respondents confirming this as part of their plan.

Those aged 18-28 were also most likely to receive a cash gift from family to help with a deposit (22%), ahead of Millennials (16%) and Generation X (8%).

Generation Z were also more likely to be using the First Home Guarantee and the First Home Super Saver schemes.

The findings come as new PropTrack data shows the median price of a home in Australia hit a new record high in April, rising 0.2% to reach $805,000.

Sydney, Brisbane and Canberra continue to be the most expensive capital cities in which to buy, with respective average home prices of $1,118,000, $882,000 and $822,000.

This article first appeared on Mortgage Choice and has been republished with permission.

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