Discretionary spending is not the only thing that’s stopping you from saving a house deposit. Bliss Conveyancing identified the hurdles and gives you some ways to jump them in this post.
Since Australian demographer Bernard Salt polarised generations over this delicious snack, the battlefield of saving a sufficient house deposit has radically changed. In 2016, it was quite easy to state that discretionary spending habits were the key to success, however in the new world, there are many more hurdles to achieving the same result.
Saving for a house deposit in Australia can be a daunting task for many individuals and families. With rising property prices and a competitive market, the barriers to saving a deposit can seem insurmountable. In this blog post, we will explore the most significant barriers to saving a deposit for a house in Australia and provide three tips to boost personal savings.
- High property prices: One of the most significant barriers to saving a deposit for a house in Australia is the high property prices. Over the last few years, property prices in Australia have skyrocketed, making it difficult for first-time buyers to enter the market. According to data from the Australian Bureau of Statistics, the average property price in Australia is around $700,000. This high cost means that individuals must save a significant amount of money to reach the required 20% deposit.
- Low income and high living costs: Another significant barrier to saving for a house deposit in Australia is the low income and high living costs. In recent years, the cost of living has increased, making it difficult for individuals to save money. Additionally, low-income earners face additional challenges in saving for a deposit. With little disposable income, it can be challenging to put aside the necessary funds to save for a deposit.
- Limited access to government grants and schemes: While the Australian government has introduced various grants and schemes to help first-time buyers save for a deposit, access to these schemes is limited. For example, the First Home Owners Grant (FHOG) provides eligible buyers with a one-time payment of up to $20,000. However, to be eligible for the FHOG, buyers must meet certain criteria, such as purchasing a new or established property. Additionally, many of these schemes have a limited budget, meaning that only a small number of buyers can access them.
Now that we’ve identified the significant barriers to saving for a house deposit in Australia let’s explore three tips to boost personal savings:
- Create a budget and stick to it: Creating a budget is one of the most effective ways to boost personal savings. A budget helps individuals track their spending and identify areas where they can cut back. To create a budget, start by tracking all income and expenses for a month. This will give you a clear idea of where your money is going. From there, identify areas where you can cut back on spending, such as eating out or subscriptions that you don’t use. Allocate a portion of your income to savings each month and stick to it.
- Consider alternative sources of income: If your income is limited, consider alternative sources of income. For example, you could start a side hustle or take on a part-time job. This extra income can be used to boost your savings and help you reach your deposit goals faster.
- Government Schemes: While we note that there are limitations, you should still explore very available opportunity to access State and Federal Government housing affordability scheme. See our post on the First Home Super Saver scheme.
- Seek professional advice: Finally, consider seeking professional advice from a financial advisor or mortgage broker. These professionals can provide valuable insights and advice on how to save for a deposit, including information on government grants and schemes that you may be eligible for. They can also help you identify ways to boost your savings and provide guidance on the best approach for your specific financial situation.
Saving for a house deposit in Australia can be a challenging task, but it is achievable with the right approach. By identifying the significant barriers to saving and implementing the three tips discussed above, individuals can boost their personal savings and achieve their goal of purchasing their first home. Clients of Bliss Conveyancing have access to our large network of professionals, please contact us if you would like a referral.