Previously known as “The Property Planner, Buyer and Professor”
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Show Notes – The Home Depsoit Hurdle
In this eye-opening episode, The Trio dig into brand-new research on housing affordability from MCG Quantity Surveyors.
But instead of looking at mortgage repayments, this report flips the focus to deposits — an obvious entry hurdle for buyers.
The findings highlight a major change
The time it takes to save a 20% deposit has tripled or even quadrupled since the 1970s.
However, the Trio also delve into the deposit size and question whether 20% is all that applicable in today’s day and age
Why deposits matter more than repayments in understanding affordability
Back in 1975, saving a 20% deposit took around six months of income.
Today, it takes two years or more.
Prices have risen 30–40× since the mid-70s, while wages have only grown 10×.
The gap is where affordability has collapsed, and it’s clearly visible across every Australian capital city.
Sydney affordability in perspective
In 1975, a family needed just $6,860 for a 20% deposit, achievable in seven months.
Fast forward to 2025, and the required deposit has blown out to $282,000 and at today’s incomes, that’s more than two years of full earnings.
Factoring in tax, rent and everyday living costs, translates to a decade or more of disciplined saving.
Brisbane’s shifting affordability story
Brisbane paints a similar picture, back in 1975 buyers could scrape together a deposit in six months.
Today, despite lower house prices compared to Sydney, Brisbane buyers still face a two-year deposit hurdle.
With house prices in Brisbane and Adelaide surging 70% since COVID, affordability in these “cheaper” markets has eroded just as sharply.
The role of government assistance
The Trio breakdown government schemes, from first-home buyer grants to stamp duty concessions.
While these policies help individuals in the short term, they’re stimulatory, adding buying power but pushing prices up.
The result?
Affordability worsens for those left out of the schemes, and the saving treadmill just speeds up.
First-home buyer lifelines
The Trio shed light on some of the advantages and initiatives on offer for today’s first home buyers.
Is the 20% hurdle a fair one to contrast to the old days?
The real affordability hurdle
Dave reminds listeners that the affordability gulf isn’t about monthly repayments, it’s about the growing difficulty of getting through the deposit door.
But he also promises to share a counter episode on deposits! Stay tuned…
Gold Nuggets
Cate Bakos’s gold nugget: Cate explains the difference between the deposit and the servicing. Both are very important, but mutually exclusive.
David Johnston’s gold nugget: Dave has some great suggestions for our first homebuyer listeners, from planning, to assessing their needs, to starting with a smaller property as a stepping stone. “You need to be pragmatic, because the earlier you get into the property market, the better.”
Mike Mortlock’s gold nugget: Mike conducts this research because he loves to start a conversation. He also mentions some statistics that Alan Kohler shared on the ABC (see notes in our shownotes).
Resources:
- Ep. 92 Property planning and your next purchase – critical considerations and why modelling financial outcomes is vital to success
- Ep. 95 Security guarantees, co-borrowing, gifts and more – Helping your kids buy their first property
- Ep. 152 Top 10 tips for first time buyers and investors – How to get it right first time
- Ep. 244 Tackling Housing Affordability – Part 1: Dissecting Proposals for Housing Innovation
- Ep. 246 Tackling Housing Affordability – Part 2: The Trio’s Blueprint to Foster a Healthy Property Market
