MEDIA RELEASE Embargoed 12:01am Tuesday July 6, 2010 QLD first home buyers save 4.5yrs for a deposit Housing affordability has continued to worsen over the past year, with first home buyers in Queensland needing 4.5 years to save for a house deposit, up from 4 years. The second annual Bankwest First Time Home Buyer Report also found thousands of young Queensland residents have been forced to rent or live at home with their parents for an extra six months, as they struggle to pull together a house deposit. The research shows a first time buyer couple in Queensland needs to raise an $84,800 deposit to purchase the median house, and $72,000 to buy a median unit. In Brisbane, a first time buyer couple would need to save for 4.7 years for a house deposit, translating into a deposit of $92,200. This is up from 4.2 years savings in March 2009. When it comes to units, the time needed to secure a down-payment is 3.7 years. 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. First time buyers wanting property in areas along the state s beautiful coastline and in the mining rich towns are taking the longest to save a deposit. 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 for a 20 percent deposit. This is based on setting aside one fifth of their combined pre-tax income annually, and includes available federal and state 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 Queenslanders are finding themselves ensnared in a rental trap. 1
Our research shows a 25 year old hoping to buy a home will be almost 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 Brisbane to settle for a unit rather than a house, because it would save them a year of renting. Interesting QLD facts: For a fist time buyer to purchase a house in Noosa, they would need to save for 6.8 years for a deposit the longest in the state. This is followed by Caloundra and Maroochy, both at 5.8 years. For a first time buyer couple to purchase a house in Paroo, they would need to save for 0.4 years for a deposit the shortest in the state. This is followed by Quilpie, at 0.6 years and Flinders, at 0.7 years. The longest savings time for a unit deposit is in Miriam Vale (6.8 years), followed by Noosa (5.3 years), and Burnett (4.9 years). The smallest savings time for a unit deposit is in Beaudesert (1.7 years). Data for the First Time Buyer 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 adrian.bradley@bankwest.com.au Elvina Simpson, Media Relations Manager, Bankwest, 0457 532 191 elvina.simpson@bankwest.com.au 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. 2
Time for FTB couples to save a house deposit in Brisbane Queensland LGAs where it takes the longest time for FTB couples to save a house deposit deposit House price $ Noosa Sunshine Coast Qld 6.8 111,300 556,500 Caloundra Sunshine Coast Qld 5.8 96,000 480,000 Maroochy Sunshine Coast Qld 5.8 95,900 479,500 Gold Coast Gold Coast Qld 5.8 101,400 507,000 Brisbane Brisbane Qld 5.7 108,900 544,500 Crows Nest Darling Downs Qld 5.1 84,500 422,500 Douglas Far North Qld 4.9 83,200 416,000 Beaudesert Brisbane Qld 4.9 95,300 476,500 Miriam Vale Wide Bay-Burnett Qld 4.8 72,800 364,000 Redland Brisbane Qld 4.8 92,800 464,000 3
Queensland LGAs where it takes the least time for FTB couples to save a house deposit deposit House price $ Paroo South West Qld 0.4 13,900 69,500 Quilpie South West Qld 0.6 15,900 79,500 Flinders North West Qld 0.7 21,500 107,500 Richmond North West Qld 0.9 24,500 122,500 McKinlay North West Qld 0.9 25,200 126,000 Waggamba Darling Downs Qld 1.0 21,700 108,500 Winton Central West Qld 1.0 22,900 114,500 Tambo Central West Qld 1.0 23,400 117,000 Bendemere South West Qld 1.0 23,400 117,000 Eidsvold Wide Bay-Burnett Qld 1.0 21,200 106,000 Queensland LGAs where it takes the most time for FTB couples to save a unit deposit deposit Unit price $ Miriam Vale Wide Bay-Burnett Qld 6.8 99,900 499,500 Noosa Sunshine Coast Qld 5.3 89,200 446,000 Burnett Wide Bay-Burnett Qld 4.9 73,800 369,000 Caloundra Sunshine Coast Qld 4.5 76,200 381,000 Maroochy Sunshine Coast Qld 4.2 71,900 359,500 Isis Wide Bay-Burnett Qld 4.2 64,100 320,500 Gold Coast Gold Coast Qld 4.1 73,500 367,500 Brisbane Brisbane Qld 4.0 78,800 394,000 Cooloola Wide Bay-Burnett Qld 3.9 60,300 301,500 Hervey Bay Wide Bay-Burnett Qld 3.6 56,800 284,000 4
Time for FTB couples to save a unit deposit in Brisbane and the Gold Coast deposit Unit price $ Gold Coast Gold Coast Qld 4.1 73,500 367,500 Brisbane Brisbane Qld 4.0 78,800 394,000 Redcliffe Brisbane Qld 3.5 70,300 351,500 Redland Brisbane Qld 3.4 67,700 338,500 Pine Rivers Brisbane Qld 3.2 64,600 323,000 Caboolture Brisbane Qld 2.9 58,900 294,500 Logan Brisbane Qld 2.5 52,300 261,500 Ipswich Brisbane Qld 2.4 50,400 252,000 Beaudesert Brisbane Qld 1.7 38,400 192,000 Editor s Notes The time taken to save a deposit for first time buyers has been calculated by comparing house and unit prices by local government area with regional income data for potential first time buyers (represented by 25-34 year olds). In calculating the time taken to save a conservative () home deposit, potential first time buyers are estimated to save of their gross income annually. The value of the first home owners grant has also been included in the deposit calculation. Average income data by statistical district has been sourced from the Australian Bureau of Statistics (ABS) census from 2001 and 2006. Income levels for 2009, 2010 and 2005 have been estimated using the increase in the ABS wage cost index over the subsequent period. Income levels for 25-34 year olds have been used as a proxy for potential first time buyer incomes. house and unit prices have been sourced from Residex and are for the years March 2005, March 2009 and March 2010. 5