Home prices v wages: what living crisis means for you

As the cost of living crunch crashes into rates rises and wages uncertainty, where and what homes Aussies can afford has changed dramatically. This is what it means for you.

The typical Aussie household needs to rake in around $140,000 a year just to afford a home, due to skyrocketing interest rates over the past year, worrying new data has revealed.

However house hunters in our capital cities will have to earn even more in order to afford a home and pay off the mortgage, according to analysis from Finder.com.au.

Sydney is the most expensive location to own and pay off a home. According to the research a Sydneysiders need to earn around $250,000 a year just to make ends meet, while in Melbourne that figure is around $175,000 per year per household.

According to the Australian Bureau of Statistics, the average Aussie household brings in around $105,000 per year.

Our interactive table below indicates how much you need to earn to buy and pay off a home in every Australian suburb.

Units are now the only affordable option for many Aussie households. Pics by Julian Andrews

The Finder.com.au study investigated the minimum income buyers required in order to afford an average-priced house or unit in each suburb without going into ‘mortgage stress’ – a situation where a household is committing more than a third of is income to mortgage repayments.

It assumed the buyer paid a typical interest rate on offer to new buyers – 6.18 per cent – and used a 10 per cent deposit.

Finder head of consumer research Graham Cooke said home ownership was slipping out of reach of new buyers faster than even during previous housing booms. “Every time the cash rate goes up, the first rung of the property ladder gets higher,” Mr Cooke said.

Here is how much you need to earn as a household to buy and afford a house and unit in each capital city and territory.

SYDNEY AND NSW

Home seekers earning less than a quarter of a million dollars a year can no longer afford to buy properties in nearly two thirds of Sydney following the fastest interest rate hikes in a generation.

And those with a household income of less than half a million dollars a year will be unable to afford houses in about 140 suburbs, or nearly one in five Sydney suburbs, exclusive analysis has revealed.

In Sydney, $86,000 was the minimum income required to purchase in the city’s cheapest suburb (Carramar, in the southwest), if using a 10 per cent deposit.

More on Sydney and NSW

MELBOURNE AND VICTORIA

Melbourne’s family home dream now has a $100,000 income barrier as new data reveals not a single housing market is in reach for the average earner.

The research group couldn’t find a single Melbourne suburb where houses were affordable for the average earner, which takes home about $90,000 a year according to 2021 Census data.

And a mortgage broking expert has warned with the increasing cost of living, even those earning enough to make mortgage repayments won’t have cash leftover for luxuries like Netflix and dining out – and even some day-to-day expenses.

In Melbourne, not a single housing market is within reach of the average earner. Picture: Nicki Connolly

In Melton, the most affordable Melbourne market for houses with a median cost of $475,775, buyers would need to earn a minimum of $101,701 annually to make the estimated $600 weekly repayment, without spending more than 30 per cent of their income — which is considered the margin for mortgage stress.

More on Melbourne and Victoria

BRISBANE AND QUEENSLAND

Buyers in four Queensland suburbs need to earn a household income equivalent to Prime Minister Anthony Albanese’s salary to afford a home, with data showing how much you need in every suburb.

Soaring interest rates have done little to drive down Queensland property prices, with exclusive new data showing that households need to earn in excess of $100,000 a year to buy in 735 suburbs.

But there are 272 suburbs where it is still possible to buy a home with a household income of less than $100,000.

Brisbane remains affordable compared to Sydney and Melbourne.

Finder data shows that buyers with a combined household income of up to $100,000 and a 20 per cent deposit can still buy a house in a range of suburbs, from outer city locales to regional hinterland and beachside towns.

More on Brisbane and Queensland

ADELAIDE AND SOUTH AUSTRALIA

Households with an annual income of less than $200,000 are priced out of more than 60 suburbs, new data reveals.

It’s worse for those earning up to $100,000 a year, which latest Australian Bureau of Statistics figures show is roughly what a typical SA family earns, with houses in 276 suburbs out of reach.

In Greater, there are 246 suburbs buyers with a combined annual household income of up to $200,000 could afford to own a house in.

More on and South Australia

Originally published as Home prices v wages: what living crisis means for you