Alan Weiss explores how young Australians can stay on track toward home ownership in a $1.4M market through smart saving and long-term focus.
In real estate, I’ve met countless young couples and individuals who share the same frustration: “We’re saving hard, but the goalposts keep moving.”
It’s a reality of today’s market — as property prices rise faster than wages, saving a house deposit can feel like a never-ending chase.
That’s why many younger Australians are looking for smarter ways to make their savings grow, rather than leaving every dollar sitting idle in the bank. One approach gaining traction is investing part of their savings in the share market — not as a substitute for property, but as a way to build momentum toward it.
The Changing Landscape of Saving
In previous generations, a disciplined saver could buy their first home within a few years. Those days are long gone.
With Sydney’s median house price now well above $1.4 million, the typical 20 % deposit sits close to $280,000, plus purchase costs. Even strong dual incomes can take years to reach that target, especially with rising rents and everyday expenses eroding savings.
The challenge isn’t just discipline — it’s scale.
This reality has led some buyers to explore ways of growing part of their savings through investment markets while keeping their long-term goal focused on home ownership.
A Balanced Perspective
Investing isn’t a shortcut, and it’s not without risk — market values rise and fall. But for some people, it’s seen as a way to help their savings work a little harder while they’re still a few years from purchasing.
The key difference is intent. The focus isn’t speculation or day-trading — it’s about building consistency, confidence, and momentum.
For others, sticking to a traditional savings plan remains the most comfortable path. There’s no single right way — just a range of approaches shaped by each person’s timeline and comfort with risk.
A Real-World Example
The Property:
A two-bedroom apartment priced around $1,400,000 in Sydney’s middle-ring suburbs.
The Buyers:
- Couple in their early 30s
- Combined household income: approximately $220,000 per year (meeting lender serviceability for a $1.12 million loan at 6.2 %)
- Monthly rent: $4,000
- Savings capacity: $2,500 per month
Deposit & Purchase Costs:
- 20 % deposit — $280,000
- Stamp duty & legal fees — ≈ $45,000–$50,000
- Total outlay to buy comfortably: ≈ $325,000
Loan & Repayments
Assuming a $1,120,000 loan (80 % LVR) at an average 6.2 % variable rate over 30 years:
- Monthly repayment: ≈ $6,880
- Weekly repayment: ≈ $1,590
At this loan size, lenders typically require a gross household income of $210,000–$220,000, allowing for living costs and a 3 % assessment buffer.
Ongoing Ownership Costs
- Strata levies: ≈ $6,000 per annum
- Council & water rates: typically $2,500–$3,500 per annum, depending on the local council and usage
- Total holding costs (excluding loan): ≈ $9,000–$10,000 per annum
- Total annual outlay (loan + charges): ≈ $91,000–$92,000 per annum
→ roughly $1,750–$1,770 per week all-in
The Capital-Growth Equation
If the property appreciates at a steady 3 % per annum, the compound growth projection is:
| Year | Estimated Value | Total Gain Since Purchase |
|---|
| 1 | $1,442,000 | +$42,000 |
| 2 | $1,485,000 | +$85,000 |
| 3 | $1,529,000 | +$129,000 |
| 4 | $1,575,000 | +$175,000 |
| 5 | $1,622,000 | +$222,000 |
| 6 | $1,671,000 | +$271,000 |
| 7 | $1,721,000 | +$321,000 |
| 8 | $1,773,000 | +$373,000 |
| 9 | $1,826,000 | +$426,000 |
| 10 | $1,881,000 | +$481,000 |
After around seven to eight years, the property’s capital growth would roughly offset its initial buying and selling costs — the break-even point. Beyond that, each year adds genuine equity.
Rent vs Ownership
If the same couple continued renting at $4,000 per month ($48,000 per year), their annual outlay would be around $44,000 less than owning once loan and outgoings are included.
However, renting yields no capital growth or equity.
After ten years of ownership:
- Estimated property value ≈ $1.88 million
- Loan balance ≈ $890,000–$900,000
- Equity position ≈ $980,000
That equity forms a long-term foundation for future security — something rent alone cannot create.
The Weiss Perspective
Ownership requires higher commitment and greater upfront cost, but it rewards consistency and time.
Renting offers flexibility, yet rarely builds lasting value.
While each path suits different life stages, one truth has never changed: property rewards patience.
Because while markets shift and strategies evolve, the desire to own your own home remains timeless.
