For a young Australian, the chances of buying your first home in a capital city is increasingly highly improbable, and rates of homeownership have sharply declined.

Domain’s recent First-Home Buyers Report reveals the number of years needed to save for your first home – and with house prices setting new records – the figures are through the roof.

The time needed for an average couple aged 25-34 years to save a 20 per cent deposit on an entry-level property has increased nationally by 11 months.

Canberra has overtaken Melbourne on the ladder, claiming second spot this year, with seven years and one month for a young couple to save a 20 per cent deposit.  

For a unit deposit, it would take a young Canberran couple three years and nine months to save.

Sydney has continued its reign as the longest time at eight years and one month, but with staggering property price increases in recent years, Canberra is starting to nip at its heels.

The report also commented on the prospective challenge of saving for a lump-sum deposit in a climate with incremental wage growth, rising mortgage repayments and rental prices, along with escalating property prices.

Domain’s Chief of Research and Economics, Dr Nicola Powell, said the First-Home Buyers Report “enables us to analyse the market variables that contribute to housing affordability, and compare annual growth across cities and areas”.

“First-home buyers are facing a growing financial hurdle when it comes to saving a deposit, and this is becoming more daunting in the context of rising living costs, low wage growth, weak saving rates and the rapid rise in property prices.”

While first-home buyers have traditionally looked further afield to seek value for money and compromised on luxuries, including commute times and space, remote working has made this balance easier, Dr Powell said.

“The decentralisation of our workforce is being embraced by middle Australia, with some working from home, even if it is for a couple of days a week, and awakening affordability,” Dr Powell said.

“In saying this, we know that not everyone is able to do this, with often lower-income workers needing to be close to their workplace as they are unable to work from home. When navigating the first-home buyer’s market, considering property type and location, or even becoming a rentvestor, can all be worthwhile.

“Government incentives such as the First Home Loan Deposit Scheme or the First Home Super Saver Scheme, which allows prospective first-home buyers to make additional superannuation contributions that are later accessible for a first home deposit, can also be advantageous to shave years off the time it takes to save for an entry-priced deposit.”

Canberra Daily would love to hear from you about a story idea in the Canberra and surrounding region. Click here to submit a news tip.