Nt First Home Buyers Save 5.1yrs For A Deposit

Embargoed 12:01am Tuesday July 6, 2010

NT first home buyers save 5.1yrs for a deposit

Housing affordability has continued to worsen over the past year, with first home buyers in the Northern Territory needing 5.1 years to save for a house deposit, up from 4.2 years. This is the highest result of all states and territories.

The second annual Bankwest "First Time Home Buyer Report" also found thousands of young Northern Territory residents have been forced to rent or live at home with their parents for an extra 10 months, as they struggle to pull together a house deposit.

The research shows a first time buyer couple in NT needs to raise a $93,200 deposit to purchase the median house, and $78,400 to buy a median unit.

In Darwin, a first time buyer couple would need to save for 4.8 years for a house deposit, translating into a deposit of $100,600. This is up from 4.0 years savings in March 2009.

When it comes to units, the time needed to secure a down-payment is 3.9 years in
Darwin.

Bankwest Retail Chief Executive, Vittoria Shortt said this was the stark reality of a strong Australian property sector.

"Increasingly we are seeing an entrenched two-speed market emerging with property owners on one side and a growing army of first home buyers seemingly locked out on the other," Ms Shortt said.

The report is part of Bankwest's on-going Financial Indicator Series, and analyses data from 544 local government areas across Australia.

The research examines how long it takes the average first time buyer couple to save for a 20 percent deposit. This is based on setting aside one fifth of their combined pre-tax income annually, and includes available federal, state and territory government first home owners' grants.

"Australia's booming property market is a double-edged sword," Ms Shortt said.

"While it's clearly of enormous benefit to established home owners it's the complete opposite for many of their children. Many potential first home buyers are facing long periods in the rental market.

"The situation has deteriorated even further now that first home owners' grants have been wound back to their original pre-GFC levels and house prices have risen.

"The cold reality is that thousands of young Territorians are finding themselves
ensnared in a rental trap.

"Our research shows a 25 year old couple hoping to buy a home will be 30 when they actually achieve that goal. It now takes longer to save for a house than it does to complete some university degrees."

The affordability crisis has forced many first time buyers in Darwin to settle for a unit rather than a house, because it would save them more than a year of renting.

Interesting NT facts:

* For a first time buyer to purchase a house in Palmerston, they would need to save for 6.3 years for a deposit the longest in the state.

* This is followed by Alice Springs, at 5.7 years and Darwin, at 5.1 years.

* It would take the longest to save a unit deposit in Palmerston (5.0 years) and Alice Springs (4.1 years).

* The shortest time for a FTB couple to save a unit deposit is in Litchfield (2.9 years).

Data for the First Time Buyer Deposit Report is derived from the Australian Bureau of Statistics Census (2006), the ABS Wage Cost 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 2010 and at www.bankwest.com.au.

Media enquiries:

Adrian Bradley
External Communications Manager, Bankwest
0427 674 851
[email protected]

Elvina Simpson
Media Relations Manager, Bankwest
0457 532 191
[email protected]

Bankwest is a wholly owned subsidiary of the Commonwealth Bank (Group). Bankwest is a full service bank which originated in Western Australia in 1895 and services more than one million customers. Bankwest promotes a range of products using cost-effective direct and third party distribution channels, including 24-hour telephone and internet services and mortgage brokers. In WA, Bankwest is a market leader with about one quarter of all bank advances and deposits and an extensive network of branches.

SOURCE: Bankwest