Why the deposit you are saving for keeps getting bigger
Here is the structural problem with saving a deposit, and it is the one nobody explains at the start.
A 20% deposit is not a fixed amount of money. It is a percentage of a number that moves. So the thing you are saving towards recalculates itself every year, against a figure you do not control, while your capacity to save grows at roughly the pace of wages.
That is the mechanism. Everything else about deposit saving follows from it.
What it looks like with numbers
Take a household aiming at an $800,000 home.
A 20% deposit today is $160,000. If prices in their market rise 7.7% over the next twelve months, which is what KPMG forecast for national house prices in its 2026 outlook, that same home is around $861,600, and the 20% deposit is now $172,320.
The target moved by about $12,300 in a year. For most households that is a meaningful share of everything they managed to put aside in the same period.
Forecasts are forecasts. KPMG's numbers are a projection, not a promise, and property markets have disappointed confident predictions in both directions many times. Treat the specific figure as illustrative of the mechanism rather than as something to plan around.
The mechanism itself is the durable part, and it holds across most of the last two decades: entry-level house prices rose 68% over five years while wages rose 21%.
Why "I'll save for another two years" so often becomes five
Because the plan is usually built on today's target.
Someone works out they need $160,000, calculates that they can save $30,000 a year, and concludes they are five years away. It is a sound calculation and it omits the moving part. Five years later the target is not $160,000, and the five-year plan has quietly become a longer one.
This is not a failure of discipline. It is a plan measured against a stationary object that is not stationary.
What this does and does not justify
It does not justify buying something you cannot afford because prices might rise. That is how people get into trouble, and it is the opposite of what anyone should take from this. Forecasts are not guarantees, and a household stretched to breaking point by its repayments is in a worse position than one still renting.
What it does justify is questioning one specific assumption: that the deposit threshold is fixed and the only variable is how hard you save.
It is not fixed. 20% is the level above which lenders require mortgage insurance, and there are established routes that reach that level without you personally producing the entire sum. The Australian Government 5% Deposit Scheme does it with a guarantee. Help to Buy does it with an equity share. Private shared equity does it with a contribution, under SmartShare, your minimum 2.5% plus purchase costs and a 17.5% contribution from HAS bring the deposit to 20%, so your primary home lender's loan sits at 80% LVR with no LMI.
The more useful question
Rather than "how long until I have saved 20%", ask two things.
Would my income comfortably service the loan on the home I actually want? If yes, you have a deposit problem rather than an affordability problem, and those are solved differently.
Which of the deposit routes reaches me? Check the government scheme first, if you are eligible it costs you nothing, and nothing else competes with that. If the price cap for your area or the first-home-buyer requirement rules you out, then the private structures are the conversation.
The households that get stuck are usually the ones who never asked the second question, because they assumed there was only one answer.
Frequently asked questions
Why does the deposit I need keep increasing?
Because a 20% deposit is a percentage of the property price rather than a fixed sum. When prices rise, the deposit required rises with them, and over the past five years entry-level house prices have risen considerably faster than wages.
Are house prices in Australia forecast to rise?
KPMG forecast national house price growth of 7.7% in its 2026 outlook, with stronger growth in some capitals. Forecasts are projections rather than guarantees and should not be relied on as the basis for a purchase decision.
Should I buy now because prices might rise?
No. Price forecasts are not a reason to buy something you cannot comfortably service. The useful conclusion is narrower: a savings plan measured against today's deposit figure may take longer than it appears.
Is a 20% deposit a legal requirement?
No. It is the threshold above which lenders require Lenders Mortgage Insurance. Several structures reach an effective 20% position without the buyer producing the full amount.
What is the minimum deposit for SmartShare?
A minimum of 2.5% of the purchase price plus purchase costs, with no genuine savings requirement, on properties valued between $600,000 and $1.6 million.
Check if I qualify → Get started, or read how long saving a deposit actually takes.