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First home buyers are not just willing to sacrifice a few luxuries, but make huge lifestyle shifts to save for a deposit, according to new research.

In fact, 30 per cent choose to move in with their parents or in-laws to save and 33 per cent worked multiple jobs to get a foot in the door, Homeloans Ltd’s survey of 500 first home buyers revealed.

National marketing manager Will Keall said first home buyers need to have a plan to build their deposit. Big lifestyle shifts could be part of it.

“It is pretty tough these days with rising cost of living to save a decent-sized deposit, so it makes sense,” Keall said.

Four out of five respondents took more than a year to save, while 39 per cent took two or more years.

“A number said it took five years to have enough money for the deposit,” Keall said. “This highlights how Australia’s high cost of living makes it challenging to save, and that property prices are stretching homebuyers to the limit.”

More than 50 per cent of respondents were saving a deposit of less than 15 per cent and the average age of the first home buyers surveyed was 28.

Working 150 hours a fortnight

David Gunter, 35, and his wife, 37, worked five jobs between them to save up a $60,000 home deposit.

Purchasing at the beginning of 2014 in Victoria’s Mount Dandenong, David Gunter worked full-time as a social worker, part-time in drug and alcohol social work and a third job as a prison officer.

The couple married in 2010 after living in Queensland, and bought their home eight months after having their first child, Olivia, who is now two years old.

“We wanted to buy in a nice area, we wanted the kids in a nice area,” he said.

He also had firm ideas of what they wanted in a house – four bedrooms, a fireplace and other unique features that made them motivated to work for their dream home.

With his wife on maternity leave when they had their first child, he had to compensate by having the extra jobs and was working 150 hours a fortnight.

He still works two of those jobs.

“As a result, our home is worth $90,000 more than what we paid for it and we’re about to buy an investment property,” he said.

“There were sacrifices,” he said, but letting his social life take a back seat was worthwhile for the home they have today, with their new 15-week-old son settling in.

Putting huge portions of income aside for a deposit

Sydney resident Hannah Espinoza, 32, put aside 65 per cent of her salary each pay day to make a deposit for an off-the-plan apartment.

Her career has since been shaped by her decision to sign on and purchase the $675,000 one-bedroom Newtown apartment in 2013, with a settlement period of two years to take advantage of the growing Sydney market.

Working at a marketing company, she had a three-month trial period after which her salary was increased an expected 10 per cent. After working there for some time, graduating from a masters degree, she expected a pay rise that didn’t eventuate.

“I had based this home on my salary increasing,” she said. “I thought it was worth taking control by starting my own business.”

She did so and moved back in with her father, rent free, to save the funds.

“We then moved in with my dad rent free, then that rent went into the savings. My salary is slightly higher than average and I don’t do anything extravagant,” Espinoza said, “It is important to sacrifice.”

Moving in with in-laws

Bridget Andersen, 21, moved into her boyfriend’s parents house in Newcastle to save money on rent.

She moved out of home at 19 into a share house in Sydney with two other girls, then rented an apartment for a year while finishing university.

Realising she’d never be able to save while renting, she moved into her boyfriend’s room, sharing the house with his parents and three other siblings.

“The lease to that apartment finished in January this year and as I was in an unstable financial position and hadn’t found a job after finishing my degree, my boyfriend’s parents offered to let me move in with him,” she said.

At $100 per week, she said that it offers them the chance to save for a home while she works as an entry-level public relations consultant. The trade-off is less privacy and space, yet she is grateful.

“It definitely has its ups and downs to share a bedroom when I’ve never had to in the past and always have had plenty of my own space and privacy which I don’t have as much of now,” she said.

“However, in terms of saving money, it’s definitely a leg-up in what is a really competitive and expensive rental market.”


Posted by Jennifer Duke – The Age on 10th June, 2015