Higher deposits, stretched LVRs & more borrowers needing mortgage insurance
New report shows the challenges involved in buying a home are getting tougher
2 min
The amount of money required for a home deposit is rising and more than half of home buyers had to pay lenders’ mortgage insurance in FY23, according to a new report released by PEXA.
NSW recorded the highest median deposit in FY23 at just below $120,000, up 3.9 percent on FY22. In Victoria, the median deposit was $84,723, down 0.5 percent, and in Queensland it was $78,143, up 8.5 percent.
The time it takes to save these deposits is on the rise. Based on the median family income in each state and a 15 percent savings rate, PEXA found NSW buyers now need an average of almost eight years to save their deposit. This is up a whopping 83 percent since 2020. It takes Victorian buyers a little over five years to save their deposit, up 64 percent since 2020. It takes Queensland buyers just under five years, up 37 percent over two years.
Average deposit-to-value ratios (DVRs) increased to about 20 percent across the three major eastern states as a result of lenders tightening their credit criteria in FY23. The DVR is the amount of cash a buyer contributes to a purchase. The average DVRs in FY23 were 20.4percent in NSW, up 1 percent on FY22; 19.5 percent in Victoria, up 0.8 percent and 19.8percent in Queensland, up 1.5 percent.
The PEXA data shows most borrowers are taking out the maximum possible LVR (loan to value ratio) to fund their purchases. The average LVRs among borrowers in FY23 were 79.6 percent in NSW, 80.5 percent in Victoria and 80.2 percent in Queensland. The research shows the major banks averaged higher LVRs, suggesting they are “more open to lower deposit borrowers, due to their visibility of borrower’s income and expenditure via existing banking relationships”. This also meant more major bank customers had to pay lenders’ mortgage insurance (LMI).
Most lenders will not lend more than 80 percent of a property’s value without forcing the borrower to pay LMI. This insurance protects the bank from default and can be very expensive. Over half of new borrowers had to pay LMI in FY23. The rate was highest in Victoria, where 56.5 percent of new borrowers had to take out LMI.
The PEXA report said rising property prices meant buyers needed higher deposits, making it tougher to buy a home and making the “generational wealth gap more apparent”.
As a result, younger buyers are increasingly tapping the Bank of Mum and Dad to help them achieve the required deposit, as well as taking advantage of government support through various programs.
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Odd Culture Group brings a new kind of after-dark energy to the CBD, where daiquiris, disco and design collide beneath the city streets.
Odd Culture Group brings a new kind of after-dark energy to the CBD, where daiquiris, disco and design collide beneath the city streets.
2 minSydney’s nightlife has long flirted with reinvention, but its latest arrival suggests something more deliberate is taking shape beneath the surface.
Razz Room, the new underground bar and disco from Odd Culture Group, has opened in the CBD, marking the group’s first step into the city centre.
Tucked below street level on York Street, the venue blends cocktail culture with a shifting, late-night rhythm that moves from after-work drinks to full dancefloor immersion.
The space itself is designed to evolve over the course of an evening. An upper bar offers a more intimate setting, suited to early drinks and conversation, while a sunken dancefloor anchors the venue’s later hours, with a rotating program of DJs and live performances.
“Razz Room will really change shape throughout a single evening,” says Odd Culture Group CEO Rebecca Lines.
“Earlier, it’s geared towards post-work drinks with a happy hour, substantial food offering, and music at a level where you can still talk.”
As the night progresses, that tone shifts.
“As the evening progresses at Razz Room, you can expect the music to get a little louder and the focus will shift to live performance with recurring residencies and DJs that flow from disco to house, funk, and jazz,” Rebecca says.
The concept draws heavily on New York’s underground club scene before disco became mainstream, referencing venues such as The Mudd Club and Paradise Garage. But the intention is not nostalgia.
“The space told us what it wanted to be,” Lines explains. “Disco started as a counter culture… Razz Room is no nostalgia project, it’s a reimagining of the next era of the discotheque.”
Design, too, plays its part in shaping the experience. The upper level is warm and textural, with timber finishes and burnt-orange tones, while the sunken floor shifts into a more theatrical mood, combining Art Deco references with a raw, industrial edge.
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