Gen Y in the dark on saving for a home deposit
Millennials may have unrealistic expectations around the deposit they need to save.
New research from ING shows most millennial Australians don't know how big a deposit they need in order to buy their first home. The bank's Millennial Homeownership Report revealed that 61% of millennials aren't sure how much they need to save, including 40% who are actively saving.
"The challenge is not in wanting a home, but how they go about getting it. While 88% of millennials want to own a home to give them a sense of security about the future – they’re just not sure how much they need to save to get a foot on the property ladder," ING Australia head of retail banking Melanie Evans said.
Of those who say they think they know how much they need, the average deposit amount they think they need to save is $76,000. While this amount would serve to provide more than a 10% deposit for a median-priced capital city home of $655,630, as per the most recent CoreLogic data, it would still see millennial home buyers paying for lenders mortgage insurance.
Moreover, the ING research shows millennials aren't looking for smaller apartments. More than 40% of millennials say they're likely to purchase a three or more bedroom house. Only 7% said they were likely to buy a one bedroom apartment.
However, millennials are willing to sacrifice on location to achieve their property ambitions. The research found 61% of millennials anticipate buying in a less established and more affordable area.