A Swiss investment bank has warned that an average Australian would need to save for “an incredible” 40 years to afford a 10 per cent mortgage deposit in Sydney.

The new UBS report assumed the saver was earning $80,000 a year, was putting aside $4000 a year, and that they were saving for a $1.2 million Sydney home that increased in price by 3 per cent every year.

Nationwide, the typical first-home buyer, if they started this year, would need to save until 2028 to afford a 10 per cent deposit on the average $400,000 home, the investment calculated. This more than doubled to 2041 if the buyer needed a 20 per cent deposit.

Worse still, if house price growth were to continue to outpace wage growth, the average first-home buyer would probably never be able to save a 10 per cent deposit unless they made a withdrawal “from the bank of mum and dad”, the authors wrote.

“Our model suggests if these trends were repeated ahead — that is an ongoing increase in the house price-income and, therefore, the household debt-income ratio — a potential first-home buyer would likely never be able to save a 10 per cent deposit to buy a home.”

However, an endless boom is not what UBS predicts. Last month, it forecast that the Melbourne and Sydney markets had reached their peak. For this exercise, the bank assumed that national price growth would slow to 5 per cent a year, and to 3 per cent in Sydney.

The report blamed this “deposit gap” for the declining share of first-home buyers in home-loan data. According to UBS’s numbers, first-home buyers account for only about 8 per cent of total home loans.

“We think a key reason for the decline in the FHB share of loans is that it takes an increasingly long time to save a deposit.”

UBS also countered the argument that Australian homes are relatively affordable compared with the days of high interest in the 1990s.

Its figures show that if the Reserve Bank were to lift rates by as little as one percentage point, from 1.50 to 2.5 per cent, the unaffordability of repayments would be perilously close to the peak of three decades ago.

The Reserve Bank will announce on Tuesday its cash rate decision for the month of June, and most experts are predicting it will hold at 1.5 per cent – for precisely the reason pointed out by UBS.