One third investors saving for years to buy property

June 03, 2016

Almost one third of investors took more than four years to save the deposit for their investment property, new data has revealed.

According to Mortgage Choice's annual Investor Survey, 30.9% of respondents said they had been saving for many years before being able to buy.

Mortgage Choice chief executive officer John Flavell said with property prices rising fairly consistently across most markets, he wasn't surprised to see so many investors struggling to save their property deposit.

“Data from CoreLogic found property values across the combined capital cities climbed 1.6% over the month of May,” he said.

“Sydney was the standout performer, with values surging 3.1% in the capital city over the course of the month.

“Over the 12 months to June, property values have risen 10.0% across the combined capital cities. And while this is impressive growth, it is made all the more impressive when you consider that this level of growth is actually significantly lower than the last couple of years.

“Since 2013, property prices have skyrocketed across most markets. As a result, investors and home buyers are finding it is taking them longer to save the deposit they need in order to purchase property.”

In addition to rising property prices, Mr Flavell said the rising cost of living was also making it harder for buyers to save a property deposit.

“With the cost of living rising substantially over the last few years, many investors are arguing that they are unable to save as much of their regular paycheck as they would like,” he said.

“According to the results from the Investor Survey, 64.7% of investors said they put less than 20% of their regular paycheck towards their deposit.

“Most people can't afford to save more than that each month. And when you consider that the average mortgage size has grown 23.4% since 2012, while the average wage has risen just 8.8% over the same time period, it isn't surprising to see so many Australians saving for years in order to buy property.”

Mr Flavell said something needed to be done to ensure housing – regardless of whether it is for owner occupied or investment purposes – doesn't become unaffordable for Australians.

“We need to make sure property ownership is still an attainable goal for all Australians as well as our future generations,” he said.