Six Years and Counting: Why Saving a Deposit Takes Longer Than Ever

For years, buying a first home has been painted as a rite of passage. In 2025, it feels more like an obstacle course. Deposits stretch into years of saving, repayments eat into paychecks, and affordability is hovering near record lows. Yet against the odds, more young buyers are stepping onto the property ladder than during much of the 2010s.

The Deposit Dilemma

An average-income household now needs 5.9 years to save a 20 per cent deposit for a median-priced home. In South Australia, it is even tougher, at 7.2 years, despite lower house prices, because average incomes are lower. No wonder nearly three-quarters of first-home buyers enter the market with less than 20 per cent down, often using government schemes or lenders' mortgage insurance to close the gap.

How Buyers Are Adapting

The numbers show creativity is no longer optional. Some first-home buyers are turning to rentvesting, purchasing in a more affordable suburb and continuing to rent in the area they want to live. Others are opting for smaller apartments or semi-detached homes rather than waiting for a detached house. These approaches may not look like the traditional path, but they are proven ways to break into the market sooner.

Government Schemes Changing the Rules

From October 2025, the Home Guarantee Scheme will expand to allow purchases with as little as a five per cent deposit and no income caps. The upcoming Help to Buy program will go further, offering shared equity so that some can step in with just a 2% deposit. In Sydney, Melbourne, Brisbane, Adelaide and Perth, higher price caps will bring far more homes under the threshold, opening doors to many who previously thought buying was impossible.

The Affordability Squeeze

A typical renter household aged 25 to 39, earning $129,000 a year, could afford the mortgage on just 17 per cent of homes sold in the past year, the lowest on record since 1995. For comparison, existing owners with a mortgage could afford 33 per cent. The gap is real, but so are the solutions. Smaller deposits, shared equity, stamp duty concessions, and flexible buying strategies are reshaping what is possible.

Where Buyers Are Searching

First-home buyers are not chasing blue-chip postcodes. They are looking west of Sydney, in Melbourne’s outer ring, and in Brisbane’s middle suburbs. These are the markets where affordability still aligns with serviceability, and where younger buyers are finding their entry points.

The Outlook

Yes, affordability remains at its toughest level in decades, but conditions are improving. With the Reserve Bank already cutting rates three times this year and another cut expected in November, borrowing capacity is on the rise. Lower rates make more homes affordable even as prices continue to rise. For first-home buyers who act now, the reward is not only security but equity growth that compounds over time.

There has never been a perfect time to buy a first home, but there have always been smart ways to do it. In 2025, the strategies may look different, but the outcome is the same: a chance to get in, to build, and to grow wealth for the future.

Ready to explore the strategies that work in today’s market? Talk to the team at Young Investors Club - enquiries@younginvestorsclub.com.au