It Takes 7.7 Years to Save a Sydney House Deposit — Here's How to Cut That Time

Domain's 2026 First Home Buyer Report has landed with a sobering headline: it takes 7.7 years to save a 20% house deposit in Sydney — the longest of any capital city. With entry-level Sydney houses now hitting $1.15 million, a 20% deposit means saving $230,000. But here's what the headline misses: you don't need 20%. With the right strategy, you can cut that timeline to under 2 years.

How Sydney Compares to Other Cities

Sydney is the clear outlier when it comes to deposit savings timelines:

Sydney is the only capital city with a seven-figure entry-level house price. Nationally, entry-level prices rose 15% — an average extra $150,000 — over the past year. Adelaide saw the sharpest five-year increase at 159%.

The silver lining? Units tell a very different story. A Sydney unit deposit takes just over 3 years to save — less than half the time for a house. In all other capitals, unit deposits take no longer than 2 years.

What a Deposit Actually Looks Like in Dollars

The 20% deposit gets all the attention, but most first home buyers don't need it. Here's how the numbers change at different deposit levels on a $1,150,000 entry-level Sydney house:

The difference is staggering: $57,500 vs $230,000. With the Home Guarantee Scheme, you could be buying a property in 2 years instead of nearly 8 — and saving up to $50,000 in LMI on top of that.

Hills District: What You Need to Buy Locally

If you're looking to buy in Sydney's Hills District, here's what deposits look like at current median prices:

The most affordable entry point in the Hills District is a Rouse Hill unit at $675,000 — requiring just $33,750 with a 5% deposit under the Home Guarantee Scheme. With the Sydney Metro Northwest connecting Rouse Hill to Chatswood, it's also one of the best-connected suburbs in the district.

5 Ways to Cut Your Deposit Timeline

1. Use the 5% Deposit Scheme (Home Guarantee)

This is the single biggest game-changer for first home buyers in 2026.

• Buy with just 5% deposit — government guarantees the remaining 15%
• No LMI — saving $14,000 to $50,000+ depending on property price
• Price cap raised to $1.5 million in Sydney (from 1 October 2025)
• Unlimited places and no income caps
• Must be a first home buyer and live in the property

On an entry-level Sydney house, this cuts your savings target from $230,000 to $57,500 — reducing the timeline from 7.7 years to roughly 2 years. See our detailed 5% deposit guide.

2. Save Through Super with the FHSS Scheme

The First Home Super Saver Scheme lets you save your deposit inside super with significant tax advantages:

• Contribute up to $15,000 per year via salary sacrifice
• Withdraw up to $50,000 per person ($100,000 for a couple)
• Contributions taxed at just 15% instead of your marginal rate (32.5-37% for most buyers)
• A couple earning $130,000 combined could save roughly $100,000 in 3.3 years through FHSS — equivalent to $115,000-$120,000 saved outside super thanks to the tax benefit

This alone could cover a 5% deposit on a Hills District unit for a couple, or make a significant dent in a house deposit.

3. Buy a Unit Instead of a House

Domain's data shows buying a Sydney unit cuts the savings timeline from 7.7 years to just over 3 years. In the Hills District, new apartments near metro stations in Kellyville, Castle Hill, and Rouse Hill offer a genuine entry point with strong capital growth potential driven by infrastructure.

4. Use a Family Guarantor

A parent or family member can use equity in their property as additional security on your loan:

• Can enable purchase with as little as zero deposit (though 5% genuine savings is typically required)
• No LMI — the guarantor's equity replaces it
• Structured as two loans to limit the guarantor's risk to a specific portion
• The guarantee can be released once you've built enough equity (usually 80% LVR)

5. Stack Multiple Schemes Together

The most powerful approach combines several strategies:

In this scenario, a couple goes from "7.7 years to save for a house" to owning a unit in 2 years — in one of Sydney's best-connected suburbs — with no LMI and no stamp duty.

The Cost of Waiting

Here's the calculation most people miss: while you're saving for a bigger deposit, property prices are rising. Sydney entry-level prices grew 15% last year alone. If that pace continues:

• That $1,150,000 house could be $1,322,500 in just one year
• Your 20% deposit target jumps from $230,000 to $264,500
• You'd need to save an extra $34,500 — just to stay in the same position

Meanwhile, mortgage repayments consume 68% of household income in Sydney. But that compares to renting at $780/week for houses or $750/week for units. Every year you spend renting while saving is money going to someone else's mortgage — not your own equity.

The Bottom Line

The 7.7-year headline is real, but it assumes the old playbook: save 20%, avoid LMI, wait until you can afford a house. In 2026, that playbook is outdated. With the expanded Home Guarantee Scheme, FHSS super savings, stamp duty exemptions, and the unit market offering a faster path, most first home buyers can get into the market in 2-3 years — not 8.

The question isn't whether you can afford to buy. It's whether you can afford to keep waiting.

Sources: Domain 2026 First Home Buyer Report; CoreLogic; ABS National Accounts September 2025; ATO First Home Super Saver Scheme; Housing Australia Home Guarantee Scheme; PRD Hills Shire Property Market Update