The quickest suburbs to save for a house deposit in capital cities are in far-flung areas

First-home buyers looking to enter the market in the shortest time possible will find themselves in far-flung suburbs barely within reach of capital city CBDs, new figures reveal.

New analysis from Domain’s First-Home Buyer Report lays bare the grim reality of housing affordability across some of the major capital cities, revealing the suburbs where it takes first-home buyers the quickest amount of time to save for a 20 per cent deposit on entry level houses pushes buyers to the outskirts, and, in some cases, outside the capital cities.

The results are dire in Sydney, with first-home buyers left looking in a handful of central coast suburbs that are closer to Newcastle than they are in the harbour city, the data found.

The trend is similar in other capital cities, where rising house prices have pushed affordable property farther out from city centres.

First-home buyers were “geographically locked out of capital city housing markets”, Laurence Troy, University of Sydney lecturer in urbanism in the School of Architecture Design and Planning, said.

“It’s almost impossible [to buy a house], to the extent that people are actually buying what is outside of the capital cities and commuting in,” Dr Troy said.

He said while some were able to eventually pass the increasing deposit hurdle, it came at a cost for many first-home buyers.

“In this very moment, it’s a game you can’t win. Yes, it takes a decade to save a deposit on a reasonable income, but if prices rise in a decade, you can’t catch up, you get farther and farther behind.”

Domain’s senior research analyst Nicola Powell said runaway house prices increased the time to save for a house in almost every pocket of Australia.

“It is tough to gain access to the market and that does mean affordable housing is found on the outskirts of our capital city,” Dr Powell said. “The time it does take to save is the shortest the farther you are away from the CBD.”

Sydney

In Sydney, the quickest time to save for a 20 per cent deposit on an entry priced house was a little over three years in Chain Valley Bay – 84 kilometres north of the city on the central coast but just 32 kilometres from Newcastle.

In fact, the top five suburbs were in neighbouring areas in the Lake Macquarie region, which is still a part of Greater Sydney, according to the Australian Bureau of Statistics boundary map.

First-home buyers have flooded the local market because it was more affordable than Sydney house prices and still within a reasonable driving distance to the city, said Tracy Gaven, of Stone Toukley and Long Jetty.

She said buyers have even told her they want smaller, more affordable mortgages they can pay off on one income.

“People don’t want to have those big mortgages because they may not have a job one day,” Ms Gaven said. “It’s more affordable and people love that lifestyle.”

Melbourne

The fastest place a first-home buyer could save a 20 per cent deposit for was in Melton, 35 kilometres west of Melbourne, where the entry priced house cost $380,000 and took about three-and-a-half years to save.

The remaining top 10 suburbs left first-home hopefuls anywhere between 30 kilometres and 40 kilometres outside the CBD if they wanted to access the housing market in the shortest amount of time.

Dallas was the closest suburb to Melbourne that allowed buyers to get into the housing market after saving for about four-and-a-half years.

Hocking Stuart Melton’s Damien Spiteri said many first-home buyers were spilling into the Melton area because they had been priced out of their first-preference suburbs closer to the city.

“We are still a very cheap market, probably the cheapest market within a 50 kilometre radius of the CBD,” Mr Spiteri said.

“A lot more are coming out because it’s more affordable than surrounding suburbs,” he said, adding that many were able to buy a bigger house or a same size house that they missed out on closer to the CBD for $100,000 cheaper.

Perth

Even in Perth, where house prices are more affordable compared with the bigger capital cities, the earliest first-home buyers can break into the housing market is two years in Armadale, 26 kilometres from Perth’s city centre.

It was followed by suburbs even farther away, leaving buyers more than 30 kilometres out if they saved for an entry priced house in Medina and Orelia, both south of Perth.

The research assumes a couple on average earnings for a 25 to 34-year-old in their city can save 20 per cent of their post-tax income every month, deposited in a standard online savings account. It excludes the transactional costs of buying property. Entry level homes are based on the 25th percentile, or the cheapest quarter of homes for sale.