“West is Best”: Study Finds Perth has Best Home Loan Saving Potential

A new study has found Perth resident’s high average income coupled with the city’s low rental costs makes the West Australia’s capital the best capital city in the country to live in while trying to save up for a deposit on a new home.

The study conducted by banking and insurance comparison website mozo.com.au found on average Perth residents had the potential to save $91,784 a year.

“West is definitely best when it comes to saving for a home deposit, with Perth benefiting from a combination of the highest household incomes and rent payments well below the national average,” says Mozo Director Kirsty Lamont.

In fact, Perth locals could save an average of $40,000 a year more than Hobart residents, who came out at the bottom of the pack in the study.

Mozo found that Hobart’s cheap rent did not offset the lower than average incomes its households received, with the saving potential of the average resident pegged at just $44,154.

The costs of household expenses in capital cities, including groceries, utilities and insurance were also factored into the study, although it was found that average income and rent were the two big determinants of people’s ability to save.

Verdict by City

Below are Australia’s capital cities, ranked according to ability to save:

Perth: Has the greatest ability to save, with the highest levels of income, average rental costs and below average living expenses.

Canberra: The second highest ability to save, despite having the highest living expenses in the country.

Darwin: The third highest household incomes, but the second most expensive rent.Brisbane: Average incomes, average rents, and average other expenses make Brisbane a “reasonable” city to attempt to save money in.

Sydney: Surprisingly, the city with the country’s highest average rent still outranked Hobart, Melbourne and Adelaide in terms of savings potential.

Melbourne: Falling into the less ‘saveable’ end of the spectrum, Melbourne has cheaper rent than Sydney, Darwin and Canberra, but only better household income than Adelaide and Hobart

Adelaide: The second worst city to save in, with lower household income than every other capital except Hobart, the South Australian capital’s lower rent still fails to make up the difference.

Hobart: With the lowest household incomes ($30,000 below the Australian average), rent & other expenses in Hobart aren’t nearly low enough to make it a place where saving is easy.