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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Citizen Kanebridge expands into Sydney’s fast-growing Norwest corridor, bringing the club back to the region where the Kanebridge story was shaped more than two decades ago.
2 min
Citizen Kanebridge, one of Australia’s premier private members’ clubs, will open a new chapter in Sydney’s fast-growing Norwest corridor, expanding its physical footprint to meet its property, finance and investment membership base where they live and work.
The club’s primary premises remains the Royal Automobile Club of Australia on Macquarie Street in the Sydney CBD — one of Australia’s most distinguished institutions — where Citizen Kanebridge members continue to enjoy full access to its storied facilities at the heart of the city.
The new Norwest chapter, to be known as Citizen Kanebridge Norwest, will be developed in partnership with Momento Hospitality, with the venue’s top floor facility serving as the primary location for key events.
Norwest has emerged as one of Sydney’s fastest-growing commercial and residential corridors, increasingly home to the developers, financiers and investors at the heart of the Citizen Kanebridge community. The move places the club at the centre of the growth story many of its members are most engaged in.
“Norwest is where the city is moving,” said Ruba Jaajaa, COO of Kanebridge Media. “For a club built around property, finance and investment conversations, it’s simply the right place to be.”
For Jaajaa, the expansion carries a personal resonance as much as a strategic one.
“There is also a wonderful sense of coming full circle in bringing Citizen Kanebridge to Norwest,” she said. “More than 20 years ago, this is where the foundations of the Kanebridge Group were first developed. Returning to the area is a warm opportunity to reconnect with the enduring relationships, trusted conversations and community that have been part of the Kanebridge story since 1999.”
Membership will be offered as a dedicated tier, the Citizen Kanebridge Norwest Individual Membership, including monthly dining credits at Momento Hospitality venues and access to the Sonato global reciprocal club network, spanning more than 250 private clubs worldwide. Members will also receive digital subscriptions to Kanebridge Quarterly, Robb Report Australia & New Zealand, and The Wall Street Journal.
Further details on the launch event calendar, membership applications and transition arrangements will be announced soon.
For further information, contact Ross Blainey at concierge@citizenkanebridge.com.au.
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