This was published 5 months ago
This is how much money Queenslanders spend on their house deposits
By Sarah Webb
Tighter lending restrictions and soaring property prices are forcing Queenslanders to hand over bigger deposits to secure a home loan, with the average buyer now putting down $85,163 in Brisbane, and $78,143 across the state.
The figures for fiscal 2023 were released in the property settlements company PEXA’s Buyer Deposits Report on Wednesday, which also revealed the median statewide deposit amount rose 8.5 per cent over the past 12 months.
Home deposits are sky-high in a handful of sea-change suburbs.Credit: Dan Peled
During that time, the average deposit-to-value ratio (DVR) climbed to 19.8 per cent, which is a year-on-year increase of 1.5 per cent.
The report explored the deposits used by buyers to purchase residential property and found that rising interest rates and tougher lending criteria fuelled the northward DVR trend.
It estimated Queenslanders would now take more than five years to save the state’s median deposit amount, compared with four years in early 2021.
PEXA’s head of research Mike Gill said while Queensland’s median deposit (DVR) of almost 20 per cent wasn’t surprising, the data did paint a picture of how tightened lending criteria affected how much buyers now need to put down to secure a mortgage.
“That’s why deposits have increased … buyers are having to stump up more cash each year so if you’re squirrelling away you are just going to have to save more and more,” he said.
“This has made the generational wealth gap more apparent, with younger demographics facing growing challenges to enter the property market.
“If that trend continues, more buyers will be locked out and buyers will have to move further and further out of the city because of those deposit requirements.”
Some of the state’s top sea-change and tree-change areas clocked the highest average DVRs, with Moreton Bay’s Ningi and Redland’s Wellington Point topping the list for DVR percentage, and Noosaville claiming the crown for the biggest deposit dollar amount.
Mr Gill suggested that interstate migration played a significant role, with cashed-up southern buyers moving to hot spots such as Noosa and the Gold Coast hinterland having substantially larger deposits.
In Ningi, buyers put down an average DVR of 28.8 per cent (or $146,785) over the past year. In Wellington Point, that deposit figure was $191,095.
Buyers in Noosaville handed over an average $266,417 deposit (equating to a 26 per cent DVR).
Nearby in Tewantin, the average DVR was 28.3 per cent ($200,000), while Doonan clocked a 28 per cent DVR ($264,061).
Senior broker and director of Noosa’s Evolve Loans Jai Hobbs said while the region swung from expensive coastal pockets to cheaper inland spots favoured by first home buyers, the high DVRs were largely fuelled by cashed-up southern migrants.
“The typical Noosa buyer is someone who sold up in Sydney and is moving up with a bag of cash. Or it’s someone here who has equity in their current home,” Mr Hobbs said.
“They are putting down up to 50 per cent for their deposit because they’ve had a house and sold it and they are rolling that equity into the next one.”
The loan ratio – or loan-to-value ratio - refers to the total borrowed to fund the property purchase. The PEXA report revealed that ratio was 80.2 per cent across Queensland.
The Queensland suburbs with the lowest DVR were in mostly rural areas and the state’s far north, with Brisbane’s Northgate and Woodridge the exceptions.
In Northgate, the average DVR was a low 13.9 per cent (or $55,704), while in Woodridge the average buyer put down a 15.4 per cent deposit (just $42,388). Buyers in Charters Towers and Roma plated up small deposits of $25,223 and $36,098.
Mortgage Choice Springwood broker Dean Naylor said the increasing cohort of young buyers in the Springwood and Woodridge areas fuelled those figures, with the average first home buyer there required to put down only about $29,000 for a $500,000 house.
“The key driver there is the stamp duty concessions [for first home buyers],” he said.
But while lower property prices in the area meant lower deposits, Mr Naylor felt many first home buyers were struggling, and many believed they were already priced out.
North Brisbane Home Loans broker and executive officer Pat Cranshaw said many young buyers failed to realise just how much lending criteria had tightened and how that impacted the required deposit.
“HECS-HELP debt [is a big contributor to that]. Just 18 months ago, the banks didn’t factor the HECS-HELP debt in, even though it was a debt, and now that’s making quite a big difference,” Mr Cranshaw said.
”On the other end of the scale, when I get bigger deposits from buyers that’s coming from higher-earning couples.”
Mr Cranshaw said that borrowers putting down less than 20 per cent risked wading into mortgage insurance territory, which also impacted borrowing capacity.