April 13, 2017
With nine in 10 first home buyers arguing that it is “very hard” to buy property at the moment, many are probably hoping they receive a Golden Goose this Easter.
“According to our Evolving Great Australian Dream whitepaper, 90.8% of first home buyers said getting into the property market was “hard”, with more than 30% labelling it “extremely hard”,” Mortgage Choice chief executive officer John Flavell said.
“This statistic, whilst startling, is not altogether surprising. One of the major hurdles facing first home buyers at the moment is saving a sufficient deposit.
“Across most markets, specifically Sydney and Melbourne, property price growth continues to outpace wage growth.”
Data from CoreLogic shows the average median dwelling price across the combined capital cities rose 10.9% over the 12 months to November 2016. Meanwhile, the Australian Bureau of Statistics shows that the average full-time wage rose by just 2.2% over the same time period.
“This data just goes to prove how hard it is for first time buyers to achieve their dream of property ownership,” Mr Flavell said.
“Of course, while it is becoming increasingly difficult for first home buyers to get their foot onto the property ladder, it is not impossible.”
Mr Flavell said first home buyers were not going to find a golden goose or golden eggs lying around this Easter that would help them fast track their home ownership goals.
“But while first home buyers are unlikely to find a Golden Goose this Easter, there are some simple tricks and hacks that everyone can use to help them save their property deposit,” he said.
“Best of all, these simple hacks don't require you to give up on all the little things you get enjoyment from, like your daily coffee.
“No doubt everyone has heard the money hack that involves giving up our café coffee every day and saving a small fortune. The fact is though, some of us get great enjoyment from our coffee, so we shouldn't have to give it up.
“Thankfully, there are a few other strategies we can use.”
1. Save 10% of your salary
“The first strategy involves saving a specific and regular portion of our wage.
“Our research found a majority of Australians don't consider themselves to be financially knowledgeable, with 60.5% rating their literacy skills as average or poor.
“Everyone has a different set of circumstances including work, living arrangements, income and age that would affect their ability to save.
“A helpful guide is putting 10% of your salary into your savings account and locking this money away so that it can't be accessed easily.”
For people who are prone to spending their savings, Mr Flavell said the best thing they can do is remove the temptation and put their money into a completely separate account that has no debit card linked with it.
2. Use cash rather than a card
Another savings hack involves using cash rather than card wherever possible.
“Australians love their credit cards, but while they are a convenient method of making purchases, it is easy to lose track of your spending,” Mr Flavell said.
“If you want to become more diligent with your spending, consider going old-school and using hard cash.
“Cash is finite, so it will force you to be conscious about your finances and think twice before you spend it on that impulse purchase.”
3. Live at home
Finally, Mr Flavell said moving back home or into cheaper accommodation is always a great way for first home buyers to save money.
“If you have been living outside of home for a while, the idea of moving back in with your folks may not sound exciting,” he said.
“However, if you are willing to live with your parents for a period of time, and it is feasible, you will be able to save a significant amount of money.
“Your living costs will be substantially lower and the money you save can make a large contribution to a deposit for your first home.”
