How to save a deposit when house prices are rising higher than wages
A report released by Domain into first home buyers has indicated that the time it takes a first home buyer couple to save a deposit has increased by just under a year, potentially taking up to five years and eight months.
With sharp gains in many metro Melbourne house prices, it has put even more pressure on wages as young couples endeavour to do everything they can to save a large enough deposit needed to break into the property market. Yet with house prices outstripping wage growth, for many first home buyers its forcing them to wait longer to save their required deposit.
As such many first home buyers have scrambled to secure a spot in Government schemes such as the First Home Loan Deposit Scheme (FHLDS) which enabled eligible first home buyers to purchase a home with as little as 5% deposit. Current places in the scheme are nearing exhaustion with most participating lenders running out of spaces to allocate to home loan applicants.
Other first home buyers are turning to family for support where 'gifted funds' from direct family members can bump up the amount of savings first home buyers have to contribute to a home. Most lenders will allow gifted funds from family members as part of the deposit provided it is not considered a debt that needs to be repaid to the parents.
In some instances, first home buyers are having to reconsider the types of properties they are seeking for their first home, either extending their search into areas which they have not considered or negotiating on the 'must haves' in terms of the property they are seeking.
Whatever their circumstance,, first home buyers have to be nimble and ready to act. The behaviours exhibited today. whether saving or spending habits, will directly impact upon how much a first home buyer can potentially borrow to enable them to purchase their first home.
A first home buyer must understand what they need to do now to put their application in the best light. Young couples and singles also must be across what government schemes are available to them to give that helping hand. It is these things which will directly impact upon whether or not a first home buyer will actually be able to secure the loan size they need.
Be quick, be nimble and get into action.
