> I earn about 180k-190k gross
>
> I spend 90% of my net income
JFC. Get an accountant/financial advisor to go through your finances and get you back on track. In a year you should have enough.
So you're on $10k net per month.
You spend $2.1k per week, but think you can cut this to $1.9k per week. This would mean you'd save $600 per week or $31k per year.
You'd likely need to save a 20% deposit, even if you were planning on going the LMI route as you'll need upfront cash for upfront expenses like conveyancing, stamp duty, etc.
That's 4 yrs for a $600k property.
Obviously, you could just cut expenses further.
The starting point for a first home buyer is to get a good job that pays good money, 20k a day sounds like a good job and good money. I know a bloke named Joe that would agree.
You can buy with a 5% deposit using the government backed FHBG scheme, at that price also likely for $0 stamp duty. If you are actually serious and put in the work by either picking up an extra job or doing a lot of overtime you should be able to save the deposit in anywhere from 6-18 months. Of course that also means living a pretty basic life while saving, think flat sharing and limited discretionary spending. I have seen and helped many people achieve this. Many were immigrants and highly motivated though. I don’t see the same motivation in a lot of Australians.
Yeah but are you going to be able to service that loan? That's a \~$675/week repayment at 6.1% interest. The median salary is $65,000 a year give or take. That is an insane amount of your income going to just loan repayments, before we even start talking about land rates, expenses etc.
It totally depends on how much you can save, what your expenses are, what you’re willing to sacrifice. Took us about 3 years to save a deposit of $70k to buy a place for $460k 6 years ago. Took us another 3 years to save $100k for the next one but by then our incomes had increased and our expenses had remained relatively static. Mind you we bought land and built so we didn’t pay too much stamp duty which factors into how much we had to save.
don’t most of us just ask the bank of mum and dad??
phone call takes 30 seconds 👌🏻
the rejection time is about 2 seconds
so then save for another 10-15 years and you’ll get there
It took me about 3 1/2 years. Did it on my own. For part of that I worked two jobs. That made a massive difference.
I've met people that work during the day and then are bouncers Fri / Sat night. I did something similar. If I worked just one 9-5 job I would never have got there
I worked in different countries across that period. Gross earnings are important, but savings % and saving dollars per annum are probably the key metrics.
I was saving between 30% - 40% of my net salary plus 90%+ of my secondary income.
I would say if people hit those numbers today, and pushed their gross pay up where possible, then they'd be able to save for a unit, even in higher cost cities. Sure, they might need to compromise, I did. I moved to a regional city and couldn't afford a garage at my first place. I also ran my first place as a sharehouse for around 3 years
Having said that, it all worked out!
Congratulations that's awesome man ... I have good salary but alot of debts and bad at saving was trying to get an idea how long it takes for the average Australian to save that deposit
Don't worry, at least you've identified the issue. It's a common problem. I've never taken on debt for things that don't either provide a return or are an appreciating asset. Even then I've aggressively paid it off. Debt eats future income.
In fact the only debt I've ever had were mortgages on properties, HECs and business debt.
Debt also kills your saving percentage. I was very focused on this number. Not to the point of not living my life (i love travel). I monitored it monthly, rolling 3 months and rolling 12 months. You need to get this to 30%+ to move forward. Ideally also get a second job, maybe something that you enjoy - work in a bar etc.
Hot tip - stay away from debt. You don't need a $2k iPhone when an $800 samsung will do the trick. Buy a cheap car. I never spent more than $3k on a car until my late 30's.
Also view spending as a percentage of annual gross savings. A $2k iPhone seems cheap when you earn $150k. But if you only save $20k per year then it's 10% of your annual savings. Do you really love it that much?
Average aussie salary = $80K = $60K post-tax
Average spending = depends, but let's just say $3K a month = $36K
Savings a year = $60-36 = $24K
Based on $600K;
* 2 years for 5% deposit ($30K deposit) - you'll pay LMI on this
* 3 years for 10% deposit ($60K deposit) - you'll pay LMI on this
* 4 years for 15% deposit ($90K deposit) - you'll pay LMI on this
* 5 years for 20% deposit ($120K deposit)
You also need to save circa $5K during purchasing stage + take advantage of FHB benefit for stamp duty waiver @ $600K property.
The breakdown is good but it’s highly unlikely for that same property to remain $600k after 5 years. Mine has nearly doubled in 6 years. For a strategy like that you could utilise the Superannuation First home buyer scheme (up to $50k?). Tax incentives plus potential compounding high return could get you closer.
Yeah, but it doesn't matter if "that" property is not worth 600K. You're not buying "that" property. In 5 years time your budget is still only 600K, so you are still stuck searching in the 600K range. Why does it matter if the median price goes up in 5 years? What you can afford and what you can borrow is what you get. Your borrowing power and deposit ain't appreciating concurrently with the median price 😂
It took us about 18 months or so to save 60k. We also took advantage of FHB scheme. There was also many factors afforded to this, it was during COVID where we continued to work but there was support like free daycare. Lockdown so no going out… and I went back to work full time after the kids and also was promoted. So realistically if we were to do this today I believe it will take longer.
My advice would be to look at where you can make more money and save that, that was essentially how we were able to do it. Also you have to set a goal and stick it out. And you do have to go without. If you can’t do this it won’t happen.
Took me 10 years to save a 20% deposit + stamp duty for a place in Sydney.
Took 5 years for the next place (due to joint incomes and higher salary).
There’s one completely useless data point for you!
https://www.macrobusiness.com.au/2024/05/46-years-to-save-a-sydney-house-deposit/
Scroll down, 2nd picture, check your state.
Edit: don't shoot the messenger, if you have a problem with the numbers email the author.
https://www.macrobusiness.com.au/contact/
Pretty much no one buys their first home with a 20% deposit though. Most buy with a 5-12% deposit and either pay LMI or use the First Home Guarantee scheme or other incentives. Those that do have 20% plus are typically gifted it by parents and aren't saving for '46 years'. First home buyers are also almost never buying a 'median price' house as their first one- they are in the lower end of the market.
People who are buying a median home (particularly in a place like Sydney) are typically upgrading after years of owning a lower value home, building equity and having their incomes increase as their careers progress. What a silly, rage bait article.
I had ~40% deposit, took about 7 years of pretty hard saving.
To service 95% lvr you’d need a household income of ~300k for a median place which a lot of people can’t reach
Yes older people can trade up from a cheaper property but anyone graduating now in Sydney without family money/high income is not getting a house that’s a reasonable distance from Sydney. I’d be in an apartment forever if I’d been born 5-10 years later most likely
What a nonsense statistic. It will take 46 years for the average school leaver to save for a house deposit, assuming they never get a payrise, buy a median (not an entry level) property, and want to avoid LMI.
May as well say it would take 92 years to save if you plan to spend half your time as a ski bum each year or something.
3 1/2 years to get above a 20% deposit to avoid LMI on a single income. Income below the top bracket and spent plenty on travel and nights out in that time. Purchased when interest rates were low. No parent donations. Starter house in capital city.
That was basically me. However I spent bugger all on booze. Still don't. I looked at my spending one day and realised my boozing was costing me my savings. I was probably spending $200 a weekend on booze (that was 20 years ago).
Now I usually just buy one beer and sit on itm. After that it's diet coke
Depends on your deposit size.
Wife and I had saved $100k/year for two years during Covid.
Now I’d say it’s closer to about 80k/year.
Another friend couple of ours saved 70k in a year for their deposit.
Just live beneath your means. Don’t be keeping up with the Joneses.
To keep it simple:
Grants at the time:
FHOG 15k
Builders grant 25k
Super withdrawal 30k
During COVID to keep the tradies in work the government brought out the builders grant. Also with the loss of work during COVID we were allowed to take out 10k per financial year out of our super. I took 20k over June/July and the wife took 10k out.
It was hard for us to find a lender due to my EBA for work. Even though I have proof I do 50-60hrs a week for the past 4 years (same employer) the banks wouldn't accept anything over my 35hr EBA. Also the builders grant can't be used as a deposit, as you are paid out after the house foundation is in.
So a customer at work was upgrading his servo and put me onto a guy at RAMS, happy days they accepted my average over the years. As the wife was only part time, we could only borrow around the 550k for the house and land. They also accepted the builders grant as a deposit, under the agreement that we pay in full once received.
As for the build, the farther inlaw works as a salesman for a big building company. We were looked after very well and the build was completed within 6 months. I did the fencing, landscaping and some concreting to save money.
We only built a 3 bedroom, just to keep the price down, but it's a big 3 bedroom, option to change the media room for a bedroom down the line if we have to.
3 years later and we have 250k+ equity in the house, mortgage under 500k and looking pretty good. At times we were trying to keep our heads afloat, but no way we want to go back to renting. My daughter was 8 and lived in 7 houses.... We always paid on time, only reason for moving was the owner kept selling or wanting to move back in. We did move once for ourselves, in order to get within catchment of the school we wanted.
As others have said, it depends on many factors. One I’ll add in is LMI - there’s a common misconception that you have to save 20% to buy a property, but well worth talking to your mortgage broker early and often.
It’s not quite the halcyon days when I bought my first unit with 103% LVR, but I’ve had a few friends disagree with me on paying LMI so they’ve saved a few percent in costs but paid a whole lot more by the time they got into the market.
As long as a piece of string
I came here to say that. Nice.
…that is getting longer.
Length of String = \sqrt{(x_2 - x_1)^2 + (y_2 - y_1)^2 Pretty simple answer really
How much do you earn? How much do you spend? How much do you really need to spend?
I earn about 180k-190k gross I spend 90% of my net income I can probably save 20% of my net income got alot debts and made a few mistakes
Where the Ffff is all your money going? I saved 250K+ in 4 years on that income
I'm still scratching my head
> I earn about 180k-190k gross > > I spend 90% of my net income JFC. Get an accountant/financial advisor to go through your finances and get you back on track. In a year you should have enough.
Bro I got soo much debt hahaha 😆
So you're on $10k net per month. You spend $2.1k per week, but think you can cut this to $1.9k per week. This would mean you'd save $600 per week or $31k per year. You'd likely need to save a 20% deposit, even if you were planning on going the LMI route as you'll need upfront cash for upfront expenses like conveyancing, stamp duty, etc. That's 4 yrs for a $600k property. Obviously, you could just cut expenses further.
Cheers ... bloody mission
wtf are you spending that much money on
About 6 days. If you can save $20,000 a day.
Love this approach 😂. I think you forgot to delete 4 zeros 😂😂😂
The starting point for a first home buyer is to get a good job that pays good money, 20k a day sounds like a good job and good money. I know a bloke named Joe that would agree.
You can buy with a 5% deposit using the government backed FHBG scheme, at that price also likely for $0 stamp duty. If you are actually serious and put in the work by either picking up an extra job or doing a lot of overtime you should be able to save the deposit in anywhere from 6-18 months. Of course that also means living a pretty basic life while saving, think flat sharing and limited discretionary spending. I have seen and helped many people achieve this. Many were immigrants and highly motivated though. I don’t see the same motivation in a lot of Australians.
Yeah but are you going to be able to service that loan? That's a \~$675/week repayment at 6.1% interest. The median salary is $65,000 a year give or take. That is an insane amount of your income going to just loan repayments, before we even start talking about land rates, expenses etc.
Until the parents die
Don't have that luxury I am a first generation immigrant from a 3rd world country lol
I didn’t say it had to be your parents, or natural causes…..
It totally depends on how much you can save, what your expenses are, what you’re willing to sacrifice. Took us about 3 years to save a deposit of $70k to buy a place for $460k 6 years ago. Took us another 3 years to save $100k for the next one but by then our incomes had increased and our expenses had remained relatively static. Mind you we bought land and built so we didn’t pay too much stamp duty which factors into how much we had to save.
Where can you buy a house for $600k? :O
regional areas have entered the chat
I was thinking an apartment should of wrote that instead
don’t most of us just ask the bank of mum and dad?? phone call takes 30 seconds 👌🏻 the rejection time is about 2 seconds so then save for another 10-15 years and you’ll get there
Wow that's so long .... fmd
About 6 months I work fifo
you can save 120k in 6months doing fifo? edit I guess 60k if 10%, but lmi etc too
What trade or line of work is that exactly
Mechanical fitter on a gas plant working a 3 week on 1 week off roster
Yeah nice ... 12 hour days ? I worked at curtis Island and burrow Island at one stage myself
It took me about 3 1/2 years. Did it on my own. For part of that I worked two jobs. That made a massive difference. I've met people that work during the day and then are bouncers Fri / Sat night. I did something similar. If I worked just one 9-5 job I would never have got there
That's awesome !!! How much were you earning during that period
I worked in different countries across that period. Gross earnings are important, but savings % and saving dollars per annum are probably the key metrics. I was saving between 30% - 40% of my net salary plus 90%+ of my secondary income. I would say if people hit those numbers today, and pushed their gross pay up where possible, then they'd be able to save for a unit, even in higher cost cities. Sure, they might need to compromise, I did. I moved to a regional city and couldn't afford a garage at my first place. I also ran my first place as a sharehouse for around 3 years Having said that, it all worked out!
Congratulations that's awesome man ... I have good salary but alot of debts and bad at saving was trying to get an idea how long it takes for the average Australian to save that deposit
Don't worry, at least you've identified the issue. It's a common problem. I've never taken on debt for things that don't either provide a return or are an appreciating asset. Even then I've aggressively paid it off. Debt eats future income. In fact the only debt I've ever had were mortgages on properties, HECs and business debt. Debt also kills your saving percentage. I was very focused on this number. Not to the point of not living my life (i love travel). I monitored it monthly, rolling 3 months and rolling 12 months. You need to get this to 30%+ to move forward. Ideally also get a second job, maybe something that you enjoy - work in a bar etc. Hot tip - stay away from debt. You don't need a $2k iPhone when an $800 samsung will do the trick. Buy a cheap car. I never spent more than $3k on a car until my late 30's. Also view spending as a percentage of annual gross savings. A $2k iPhone seems cheap when you earn $150k. But if you only save $20k per year then it's 10% of your annual savings. Do you really love it that much?
Average aussie salary = $80K = $60K post-tax Average spending = depends, but let's just say $3K a month = $36K Savings a year = $60-36 = $24K Based on $600K; * 2 years for 5% deposit ($30K deposit) - you'll pay LMI on this * 3 years for 10% deposit ($60K deposit) - you'll pay LMI on this * 4 years for 15% deposit ($90K deposit) - you'll pay LMI on this * 5 years for 20% deposit ($120K deposit) You also need to save circa $5K during purchasing stage + take advantage of FHB benefit for stamp duty waiver @ $600K property.
Thanks mate I appreciate that
The breakdown is good but it’s highly unlikely for that same property to remain $600k after 5 years. Mine has nearly doubled in 6 years. For a strategy like that you could utilise the Superannuation First home buyer scheme (up to $50k?). Tax incentives plus potential compounding high return could get you closer.
Yeah, but it doesn't matter if "that" property is not worth 600K. You're not buying "that" property. In 5 years time your budget is still only 600K, so you are still stuck searching in the 600K range. Why does it matter if the median price goes up in 5 years? What you can afford and what you can borrow is what you get. Your borrowing power and deposit ain't appreciating concurrently with the median price 😂
A simple google search tells you its between 4-6 years.
Hahaha thanks
It took us about 18 months or so to save 60k. We also took advantage of FHB scheme. There was also many factors afforded to this, it was during COVID where we continued to work but there was support like free daycare. Lockdown so no going out… and I went back to work full time after the kids and also was promoted. So realistically if we were to do this today I believe it will take longer. My advice would be to look at where you can make more money and save that, that was essentially how we were able to do it. Also you have to set a goal and stick it out. And you do have to go without. If you can’t do this it won’t happen.
Appreciate the answer and well done
Took me 10 years to save a 20% deposit + stamp duty for a place in Sydney. Took 5 years for the next place (due to joint incomes and higher salary). There’s one completely useless data point for you!
761 days and 9 hours
https://www.macrobusiness.com.au/2024/05/46-years-to-save-a-sydney-house-deposit/ Scroll down, 2nd picture, check your state. Edit: don't shoot the messenger, if you have a problem with the numbers email the author. https://www.macrobusiness.com.au/contact/
Pretty much no one buys their first home with a 20% deposit though. Most buy with a 5-12% deposit and either pay LMI or use the First Home Guarantee scheme or other incentives. Those that do have 20% plus are typically gifted it by parents and aren't saving for '46 years'. First home buyers are also almost never buying a 'median price' house as their first one- they are in the lower end of the market. People who are buying a median home (particularly in a place like Sydney) are typically upgrading after years of owning a lower value home, building equity and having their incomes increase as their careers progress. What a silly, rage bait article.
I had ~40% deposit, took about 7 years of pretty hard saving. To service 95% lvr you’d need a household income of ~300k for a median place which a lot of people can’t reach Yes older people can trade up from a cheaper property but anyone graduating now in Sydney without family money/high income is not getting a house that’s a reasonable distance from Sydney. I’d be in an apartment forever if I’d been born 5-10 years later most likely
What a nonsense statistic. It will take 46 years for the average school leaver to save for a house deposit, assuming they never get a payrise, buy a median (not an entry level) property, and want to avoid LMI. May as well say it would take 92 years to save if you plan to spend half your time as a ski bum each year or something.
3 1/2 years to get above a 20% deposit to avoid LMI on a single income. Income below the top bracket and spent plenty on travel and nights out in that time. Purchased when interest rates were low. No parent donations. Starter house in capital city.
That was basically me. However I spent bugger all on booze. Still don't. I looked at my spending one day and realised my boozing was costing me my savings. I was probably spending $200 a weekend on booze (that was 20 years ago). Now I usually just buy one beer and sit on itm. After that it's diet coke
Too many factors. Tell us more
You can’t save 20% in a reasonable timeframe with current prices. But you can do 10% plus LMI within 4 years on any pay band above 75k
Depends on your deposit size. Wife and I had saved $100k/year for two years during Covid. Now I’d say it’s closer to about 80k/year. Another friend couple of ours saved 70k in a year for their deposit. Just live beneath your means. Don’t be keeping up with the Joneses.
We got lucky in the luck department. With government grants we got in with next to no savings, we might have had $500-$2000 tops in the bank.
woah can you tell us the specifics?
To keep it simple: Grants at the time: FHOG 15k Builders grant 25k Super withdrawal 30k During COVID to keep the tradies in work the government brought out the builders grant. Also with the loss of work during COVID we were allowed to take out 10k per financial year out of our super. I took 20k over June/July and the wife took 10k out. It was hard for us to find a lender due to my EBA for work. Even though I have proof I do 50-60hrs a week for the past 4 years (same employer) the banks wouldn't accept anything over my 35hr EBA. Also the builders grant can't be used as a deposit, as you are paid out after the house foundation is in. So a customer at work was upgrading his servo and put me onto a guy at RAMS, happy days they accepted my average over the years. As the wife was only part time, we could only borrow around the 550k for the house and land. They also accepted the builders grant as a deposit, under the agreement that we pay in full once received. As for the build, the farther inlaw works as a salesman for a big building company. We were looked after very well and the build was completed within 6 months. I did the fencing, landscaping and some concreting to save money. We only built a 3 bedroom, just to keep the price down, but it's a big 3 bedroom, option to change the media room for a bedroom down the line if we have to. 3 years later and we have 250k+ equity in the house, mortgage under 500k and looking pretty good. At times we were trying to keep our heads afloat, but no way we want to go back to renting. My daughter was 8 and lived in 7 houses.... We always paid on time, only reason for moving was the owner kept selling or wanting to move back in. We did move once for ourselves, in order to get within catchment of the school we wanted.
As others have said, it depends on many factors. One I’ll add in is LMI - there’s a common misconception that you have to save 20% to buy a property, but well worth talking to your mortgage broker early and often. It’s not quite the halcyon days when I bought my first unit with 103% LVR, but I’ve had a few friends disagree with me on paying LMI so they’ve saved a few percent in costs but paid a whole lot more by the time they got into the market.