This article is for general information purposes only and reflects the state of information at the time of publication. It is not legal or financial advice. Always seek professional advice tailored to your specific circumstances before making decisions.
Discretionary spending is not the only thing stopping you from saving a house deposit. Bliss Conveyancing has identified the hurdles and offers some ways to overcome them.
Salty
Since Australian demographer Bernard Salt polarised generations over this popular snack, the battlefield of saving a sufficient house deposit has changed. In 2016, discretionary spending habits were a key factor, but today there are many more hurdles to achieving the same result.
The Barriers
Saving for a house deposit in Australia can be daunting. With rising property prices and a competitive market, the barriers to saving can seem insurmountable. Here are the most significant barriers:
1. High Property Prices
One of the most significant barriers is high property prices. Over recent years, property prices in Australia have skyrocketed, making it difficult for first-time buyers. According to the Australian Bureau of Statistics, the average property price in Australia is around $700,000. This high cost requires saving a substantial amount for the typical 20% deposit.
2. Low Income and High Living Costs
Another barrier is low income combined with high living costs. Increasing expenses make saving challenging, particularly for low-income earners with little disposable income.
3. Limited Access to Government Grants and Schemes
While the government offers grants and schemes to help first-time buyers, access is limited. For example, the First Home Owners Grant (FHOG) provides up to $20,000 but eligibility requires meeting specific criteria, such as purchasing a new or established property. Budget limitations mean only a small number of buyers can access these schemes.
The Leg-Ups
Now that we’ve identified the significant barriers, here are tips to boost personal savings:
1. Create a Budget and Stick to It
Creating a budget is an effective way to boost savings. Track income and expenses for a month to understand spending patterns. Identify areas to cut back, such as dining out or unused subscriptions, and allocate a portion of income to savings each month.
2. Consider Alternative Sources of Income
If income is limited, explore alternative sources such as a side hustle or part-time job. Additional income can accelerate savings and help reach deposit goals faster.
3. Government Schemes
Despite limitations, explore available State and Federal Government housing affordability schemes. See our post on the First Home Super Saver scheme.
4. Seek Professional Advice
Consider consulting a financial advisor or mortgage broker. Professionals can provide guidance on government grants, boosting savings, and strategies tailored to your financial situation.
Saving for a house deposit in Australia is challenging but achievable with the right approach. By understanding the barriers and applying these strategies, individuals can increase their savings and achieve their goal of purchasing a first home. Clients of Bliss Conveyancing have access to a large network of professionals; please contact us if you would like a referral.
