LOCAL PROPERTY NEWS

Prospective home buyers in financial squeeze

March 25, 2007

ROCKETING house prices and soaring rents have created a double whammy for first-home buyers in Queensland.

Their mortgage repayments relative to income are at an all-time high, but saving for a decent deposit is now so much harder because they are paying higher rents.

Consider a young couple earning $40,000 a year each. Tax will take about $7,500 each, which would leave them with a net combined annual income of $65,000. If we deduct rent of $20,000 a year, and living expenses of $26,000 a year, there is only about $19,000 left over for saving. Even with this healthy surplus, it would still take them the best part of two years to save a 10 per cent deposit on a $350,000 starter home.

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