Aussies making sacrifices to get on to the property ladder
21 June 2014
- 7 in 10 (72%) make spending sacrifices when saving for their home loan deposit
- 2 in 5 (40%) found saving for a deposit difficult
- 36% found saving for stamp duty on top of a deposit challenging
Two in five home-owners say the hardest part of purchasing a house is saving the money for the deposit, according to the findings of the 2014 Westpac Home Ownership Report.
The report also found more than a third (36%) of Australians find it difficult to save for stamp duty, ahead of navigating red tape (34%), understanding the best loan structure (32%) and adjusting their lifestyle to accommodate repayments (21%).
"Saving for a deposit requires focus and discipline; it can be challenging, there's no debating that, but it certainly can be done if you set yourself an achievable goal," said Gai McGrath, Westpac General Manager of Retail Banking.
According to the report, two in five (19%) Australians contribute between 6 per cent and 10 per cent for their deposit and $230,000 is the average loan amount borrowed (national average). Forty per cent said saving for a deposit was the most difficult part before they could actually get on the property ladder.
To speed up the process of saving for a deposit, 7 in 10 (72%) of Australians make lifestyle sacrifices, leading with choosing to eat out at restaurants fewer times a week (77%), followed by entertainment out of home (72%) and taking lunch to work (61%).
"Small changes in your discretionary spending can result in big savings over time. This could be anything from going without that second takeaway coffee each day, reducing how often you go out for dinner or taking your lunch to work. All of these small changes can add up to thousands of dollars of savings a year.
"You can also make your money work harder for you by putting your savings in a high interest savings account which rewards you for making regular contributions.
"However, make sure you don't set yourself up for failure. If you've set yourself the goal of saving your deposit in two years, it's unrealistic to think you can sacrifice everything for two years. Choose key areas where you can make sustainable but impactful sacrifices.
"The other step you can take is to visit a home finance manager well in advance of buying a property to ensure you can put a sound savings strategy in place. Many people don't realise that they are more than welcome to go into a branch to get advice months or years before they're ready to apply for a loan."
To find out how much you need to purchase a property, visit Westpac's deposit calculator online
About the Westpac Home Ownership Report
This survey was commissioned by Westpac and powered by Sweeney Research. Sweeney surveyed 1,000 Australians who have taken out a home loan within the past ten years via the Research Now Online Panel. It was conducted between 7 January and 11 January 2014.
- 2 in 5 (40%) borrowers found saving for a deposit difficult.
- To speed up the process of saving for a deposit, 7 in 10 (72%) of Australians make lifestyle sacrifices.
- More than a third (36%) of Australians find it difficult to save for stamp duty on top of a deposit, ahead of navigating red tape (34%), understanding the best loan structure (32%) and adjusting their lifestyle to accommodate repayments (21%).
- Two in five (19%) outlay between 6 per cent and 10 per cent for their deposit, and $230,000 is the average loan amount borrowed.
- Top five saving sacrifices:
1. Meals at restaurants / cafes (77%)
2. Entertainment out of home (72%)
3. Lunch at work (61%)
4. Clothes and shoes (59%)
5. Grooming (47%)