Window rapidly closing for home buyers - assuming one thing
First-home buyers in most Australian capital cities haven't received a whole lot of good news over the past decade, with soaring prices putting property out of reach for many.
But new analysis shows those who are looking to purchase in major markets like Sydney and Melbourne can save a deposit in a considerably shorter period of time.
So if the market really is stabilising, as many real-estate and property companies with crossed fingers point out, this is a good time to buy.
Research from consumer comparison website finder.com.au found the period of time to accumulate a 20 per cent deposit for a house in Sydney had reduced by one year and nine months since June 2017.
That's the time when median house prices in the New South Wales capital began to slide, plunging by 11.9 per cent in the time since.
In Melbourne, the shorter savings period was more modest, with buyers in the Victorian capital able to save a 20 per cent house deposit four months quicker than at the end of the boom.
"Anything that speeds up the ability to get a deposit together is going to be good news for those hoping to buy their first home," finder.com.au insights manager Graham Cooke said.
"And for anybody who has saved their deposit and is ready to go, it potentially means buying a larger home or putting a higher percentage towards a place."
In Sydney, based on the median house price, a deposit of $173,600 is required to meet the 20 per cent requirement, down $30,400 since June 2017.
However, as is the case with the notoriously expensive property market, that positive news comes with a caveat.
It still takes on average a considerable time to scrape that amount together, based on average wages - just shy of 10 years in total.
"It's definitely daunting," Mr Cooke said.
"Outside of Sydney, the median house price will be lower. But there's still a big disparity between house prices and incomes."
When it comes to units, there was also a reduction in the average time needed to save a deposit in Sydney - down 10 months to a total of seven years and eight months.
The price declines in Sydney and Melbourne present an opportunity for first-timers to crack into the market sooner.
But that window of opportunity could be closing already, with signs of a looming market recovery.
New data out on Tuesday from property research firm CoreLogic found median home values in Sydney jumped by 1.7 per cent in the month of September. Median prices increased by the same amount in Melbourne last month.
September's results for the country's two biggest cities mirrored increases in August on the back of renewed confidence and lower interest rates, CoreLogic found.
Sydney median dwelling values were up a cumulative 3.3 per cent and Melbourne up 3.2 per cent in August and September.
"Although housing values are now consistently tracking higher, at least at a macro-level, the national index remains 6.8 per cent below the October 2017 peak, indicating that buyers still have some time to take advantage of improved housing affordability before values return to record highs," CoreLogic head of research Tim Lawless said.
Mr Lawless said low interest rates and a loosening in lending restrictions was benefiting markets across Australia.
However, in Sydney and Melbourne, economic and demographic conditions were seeing those cities outperform their small capital counterparts.
"Population growth is higher, unemployment is lower and jobs growth is stronger, providing a solid platform for housing demand," Mr Lawless said.
Auction clearance rate data, plotting the number of homes to sell under the hammer each Saturday, shows a sharp uptick over the course of the year.
Another likely contributor to the growth in recent months is an increase in demand far outpacing the available supply. Sydney and Melbourne have historically low volumes of listings as sellers look to be sitting on their hands.
In May 2019, the number of new dwellings to hit the market in Sydney was 5157 compared with 7460 at the market peak in 2017, while in Melbourne it was 5804 compared with 7944 at the peak.
"There's still a very low volume of stock on the market, so that could spark further price rises also," Mr Cooke said.
"We're seeing such low listing volumes that I reckon there's a sizeable backlog of people waiting to sell who've been holding off. If they hit the market around the same time, that could have a negative impact on prices."
A deterioration in the national economy and global political uncertainty could also impact price growth in the short to medium-term, he said.