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Tips for Gen Z to Save a First Home Deposit

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You’re dreaming of owning your first home but feeling overwhelmed by the thought of saving your deposit? You’re not alone. With property prices soaring and the cost of living rising, saving for a home can seem like a daunting task.

But fear not! As Australia’s most non-realestatesy Property Buyers Agent I’m here to guide you through practical tips and strategies to help you save your deposit and unlock the door to homeownership. This guide is tailored specifically for young, Aussie first home buyers, offering valuable insights, data, and resources to get you started on the right foot.


Why Buying Property as a Gen Z is Important

Before we dive into the savings tips, let’s first understand why buying property is a significant milestone for Zers. Let’s also turn that dystopian view of never-being-able-to-afford-a-home into some lightening focused motivation to become a home owner. Here are a few key reasons:

  1. Building Wealth and Equity: Owning property allows you to build equity over time, which can be a powerful tool for wealth creation. As you pay off your mortgage, your equity in the property increases, providing you with a valuable financial asset. Think free money, and lots of it. That’s what equity is.
  2. Stability and Security: Renting can be unpredictable, with the risk of rent increases and lease terminations. Owning a home provides stability and security, giving you control over your living environment. Get yourself out of the rental crisis PRONTO.
  3. Long-Term Investment: Real estate is generally considered a solid long-term investment. According to CoreLogic, Australian property values have historically shown steady growth, making homeownership a prudent financial decision. Going out till 4am on a Sunday with work on Monday may not be a smart decision, buying property is a smart decision. Do it.
  4. Independence and Personalization: Owning your own home means you can personalize and modify it to suit your tastes and needs without seeking landlord approval. It’s your space, your rules! Get ready for that feature wall you’ve always wanted but mom and dad vetoed.


So, How Much Deposit is Needed?

In Australia, the minimum deposit required for a home loan typically ranges from 5% to 20% of the property’s purchase price. However, it’s important to note that if your deposit is less than 20%, you may be required to pay Lenders Mortgage Insurance (LMI). Here’s a breakdown:

– 5% Deposit: With a 5% deposit, you can enter the property market sooner, but you’ll need to pay LMI, which can be quite costly. It may be a very handy way of simply getting into the market SOONER and having equity outweigh your LMI woes.

– 10% Deposit: A 10% deposit reduces the LMI cost but still requires you to pay this insurance. It’ll get you into the market pronto though, and that’s a plus.

– 20% Deposit: A 20% deposit eliminates the need for LMI, saving you money in the long run and providing better loan terms. If you’ve got the 20% you’re winning. Noice!

For example, if you’re looking to buy a decent starter property in Sydney valued at $700,000, here’s what the deposit amounts would look like:

– 5% Deposit: $35,000

– 10% Deposit: $70,000

– 20% Deposit: $140,000


Tips to Save for Your Deposit

Now that you understand the importance of homeownership and the deposit requirements, let’s explore some practical tips to help you save for your deposit

  1. Set a Clear Savings Goal

Start by setting a clear and realistic savings goal based on the property price range you’re targeting. Use a home loan calculator to determine the deposit amount and factor in additional costs such as stamp duty, legal fees, and moving expenses. I know it’s boring but doing this once will get you set up right from the start. It’s worth it!


  1. Create a Budget and Stick to It

Creating a budget is essential for managing your finances and identifying areas where you can cut back and save. Track your income and expenses to understand your spending habits and find opportunities to reduce discretionary spending. Another boring task but 100% your future self will thank you!

Pro Tip: Use budgeting apps like YNAB (You Need a Budget) or Pocketbook to keep track of your finances and stay on top of your savings goals.


  1. Open a High-Interest Savings Account

Maximize your savings by opening a high-interest savings account. Look for accounts that offer competitive interest rates and low fees. Consider online banks, which often provide better rates than traditional brick-and-mortar banks. Use your savvy to save your bikkies peeps.

Recommended Resource: Check out Canstar at for comparisons of high-interest savings accounts in Australia.


  1. Automate Your Savings

Automating your savings can help you stay disciplined and ensure consistent contributions towards your deposit. Set up automatic transfers from your checking account to your savings account on payday to avoid the temptation of spending that money. This is a GAMECHANGER. You won’t miss what you never see so make sure to have your savings automatically taken from your pay from payday.


  1. Take Advantage of Government Schemes

The Australian government offers several initiatives to help first home buyers, including:

– First Home Loan Deposit Scheme (FHLDS): Allows eligible first home buyers to purchase a property with a deposit as low as 5% without paying LMI.

– First Home Super Saver Scheme (FHSSS): Enables you to save for a home deposit within your superannuation fund, benefiting from the tax advantages of super contributions.

– State-Based Grants and Concessions: Many states offer first home owner grants and stamp duty concessions. Check the specific programs available in your state.

Recommended Resource: Visit the Australian Taxation Office (ATO) at for more information on the FHSSS and the National Housing Finance and Investment Corporation (NHFIC) at  for details on the FHLDS.


  1. Cut Back on Discretionary Spending

Identify areas where you can reduce discretionary spending and redirect those funds towards your savings. This might include dining out less frequently, cutting back on subscriptions, or finding more affordable entertainment options. Uber One, Spotify, and maybe one of your streaming services can go bye byes NOW.

Pro Tip: Use the 50/30/20 budgeting rule, where 50% of your income goes to needs, 30% to wants, and 20% to savings. Adjust the percentages to prioritize saving for your deposit.


  1. Boost Your Income

Increasing your income can significantly accelerate your savings progress. Consider taking on a part-time job, freelancing, or exploring gig economy opportunities. Additionally, seek out opportunities for promotions or salary increases at your current job. That’ side hustle could be your deposit saving supercharger! Hello Only Fans = ka-ching!


  1. Reduce Debt

High-interest debt can hinder your savings efforts. Focus on paying down credit card debt, personal loans, and other high-interest liabilities to free up more money for your deposit fund. Consider using the debt avalanche or debt snowball method to tackle your debts strategically.


  1. Live Frugally

Adopting a frugal lifestyle can help you save more effectively. Look for ways to reduce your living expenses, such as sharing accommodation, cooking at home, and using public transport instead of owning a car. Small changes can add up to significant savings over time. Meal prep, homemade lunches and a little less Uber Eats can make all the difference.


  1. Invest Wisely

If you have a longer time horizon before you plan to buy a home, consider investing a portion of your savings in low-risk investment options like term deposits, government bonds, or diversified ETFs. Investing can potentially yield higher returns than a savings account, helping you reach your goal faster.

Recommended Resource: Visit ASIC’s MoneySmart  for investment tips and advice tailored to first-time investors.


  1. Utilize Windfalls

Windfalls such as tax refunds, bonuses, or monetary gifts can provide a substantial boost to your savings. Commit to depositing these windfalls directly into your deposit savings account to accelerate your progress.


  1. Seek Professional Advice

Working with a financial advisor or a buyers advocate can provide valuable insights and personalized strategies to help you save for your deposit. They can help you create a tailored savings plan, navigate government schemes, and optimize your savings efforts.

Saving for a deposit on your first home may seem like a daunting task, but with the right strategies and discipline, it is achievable. By setting clear goals, creating a budget, leveraging government schemes, and making smart financial decisions, you can turn your homeownership dream into a reality.

Remember, every small step counts. Start today, stay committed, and keep your eye on the prize. With determination and perseverance, you’ll be unlocking the door to your first home in no time. If you’re not sure where to start, drop us an email and we’ll help get you sorted

Happy saving, Gen Z

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