Higher deposits, stretched LVRs & more borrowers needing mortgage insurance

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.

Australian furniture brand King Living has expanded its Aura Collection with the launch of a new modular sofa designed to blend contemporary aesthetics with adaptable living.

The Aura Sofa builds on the success of the Aura Island range, first introduced in 2023, which included indoor and outdoor sofas as well as fixed and swivel occasional chairs.

The latest evolution introduces modular functionality to the collection, allowing homeowners to configure the sofa to suit a variety of spaces and uses.

As living spaces continue to evolve, particularly in urban environments where flexibility is increasingly valued, furniture designers are placing greater emphasis on products that can adapt over time.

King Living says the new Aura Sofa has been developed with this trend in mind, enabling customers to create corner, L-shaped or U-shaped layouts, while also allowing additional modules to be added as needs change.

King Living founder David King said the original Aura concept began as an exploration of sculptural design before being reimagined as a modular system.

“Aura began as an exploration of sculptural form. Now, we’ve brought modularity into that design language, giving the freedom to reimagine your space with a modular design made for flexibility,” he said.

The collection’s defining feature remains its soft, flowing silhouette, with curved forms replacing traditional angular sofa designs.

The company describes the sofa as a response to changing lifestyles, where living rooms increasingly serve multiple purposes, from entertaining guests and family gatherings to quiet reading corners and work-from-home spaces.

Its rounded profile and minimalist aesthetic are intended to enhance the flow of contemporary interiors while maximising available space. According to the company, the design is equally suited to compact apartments and larger open-plan homes.

“Today, living space is both a luxury and a constraint. Aura is our response, a purposeful design that proves when intention and fluidity converge, the result can feel both expansive and refined,” King said.

Beyond aesthetics, the new sofa incorporates several engineering features synonymous with the King Living brand.

These include the company’s Postureflex steel suspension system, extra-high pocket springs and its signature steel frame, which is backed by a 25-year warranty. The company says the design has been engineered to deliver long-term comfort and durability.

Sustainability has also been a focus of the design. Each module features a removable cover that can be professionally cleaned, repaired or replaced individually, reducing the need to replace an entire sofa and potentially extending the product’s lifespan.

The Aura Sofa is available made to order in a range of premium fabrics and European leathers, allowing customers to tailor the piece to different interior styles and colour palettes.

Designed, manufactured and sold exclusively by King Living, the Aura Sofa launched in showrooms and online early this month, marking the latest addition to the Australian company’s growing portfolio of modular furniture designs.

Higher deposits, stretched LVRs & more borrowers needing mortgage insurance

New report shows the challenges involved in buying a home are getting tougher

King Living has unveiled a modular version of its Aura Sofa, bringing greater flexibility to the sculptural design collection as demand grows for furniture that can adapt to changing lifestyles.