Of those who are renting or not already owning a home, 36% say there is “no way” they could save a reasonable deposit over the next one to three years, according to research from ING DIRECT.
41% of potential first home buyers believe they will need a higher paying job or need to take on a second job to fulfill their home ownership dream. And only one in five (21%) say they’ll be able to save a reasonable home deposit within the next three years through saving.
- 21% of first homebuyers say they should be able to save a deposit in the next three years.
- The remaining first homebuyers will take a variety of steps to build a deposit:
- 24% will get a better paying job
- 17% plan to take on a second job
- 7% will ask family members for a loan
- 3% will drawdown their credit cards
- 1% will take out another credit card
Ability to save a deposit varies widely with income and location
The research, which was conducted prior to the November rate cut as part of ING DIRECT’s Household Financial Wellbeing Index, found that across all first homebuyers, 21% say they will be able to save a reasonable deposit in the next one to three years. This figure rises to 41% of high income earners (household income over $100,000 annually) compared to 8% of low income earners (income below $40,000 annually).
Only 13% of first homebuyers residing in state capitals expect to save their deposit within three years – half the proportion (27%) of regional first homebuyers.
A fatter pay cheque the key to fast-tracking a deposit
One in four first homebuyers (24%) say the only way they will be able to save a purchase deposit in the next one to three years is by getting a better paying job. High income earners (29%) are more likely to seek a new job compared to 19% of low income earners.
Almost one in five (17%) of first homebuyers will take on a second job to save a deposit. Women (22%) are more likely than men (13%) to get a second job, though even among high income earners 17% see a second job as the solution to saving a purchase deposit.
Singles, Queenslanders and low income earners struggle
More than one in three (36%) first homebuyers say there is “no way” they will be able to save a first home deposit within the next three years.
Among Queenslanders this rises to 56%, with the majority of single buyers (57%) also claiming they won’t be able to amass a deposit in under three years.
PR Manager, ING DIRECT
Ph: 02 9018 5160
M: 0413 317 225
The ING DIRECT Financial Wellbeing Index was complied by Galaxy Research between Wednesday 28 September and Monday 3 October 2011 by surveying 1,009 household financial decision-makers aged 18–69 years. The data was weighted by region and household size to reflect the Australian household population based on the 2006 census. The level of savings reported in the study is also calibrated to APRA national bank total deposits (households) to ensure accuracy of household savings levels.
About ING DIRECT
ING DIRECT began operating in Australia in 1999. By doing business online, over the phone and through intermediaries, ING DIRECT keeps it overheads low and passes the savings onto customers in the form of competitive rates. Today, it has grown to become Australia’s fifth largest retail bank, with $24 billion in deposits, more than $37 billion in loans and around 1.4 million customers.
Please note ING DIRECT is never abbreviated to ING.