How much you need to earn to buy in every Qld suburb

The income threshold to buy a home in 2024 has surged alarming new heights in some parts of the state. SEE HOW MUCH YOU NEED IN EVERY SUBURB

How much you have to earn to buy in Qld

Householders now need to earn more than $500,000 to own a home in some Queensland suburbs, with new data showing the income threshold to buy property in the Sunshine State has surged by up to 50 per cent in a year.

Exclusive research by comparison site Finder found buyers will fork out an extra $14,000 on average every year to service their mortgage, while securing a loan for a house or unit in 186 Queensland markets requires a pay rise of 30 per cent or more.

The analysis assumed a 30-year loan term with a 20 per cent deposit.

Finder head of consumer research Graham Cooke said the combined forces of rising interest rates and soaring home prices had pushed the income bar to new extremes in many areas – often by amounts eclipsing average wage increases.

“It’s the rising cost of interest that’s probably having the biggest impact generally, but there have also been many suburbs where prices have gone up significantly,” Mr Cooke said.

“That’s left many people in the position where they need to spend more than they did a year ago but, unless their income has really gone up, the amount they can borrow is less.”

Finder head of consumer research Graham Cooke

Bank lending practices were an additional hurdle for new buyers.

“It was a competitive market when rates first started to increase (in 2022) as the banks were trying hard to get new business. Now that’s starting to pull back,” Mr Cooke said.

“It’s difficult to track but there’s anecdotal evidence that banks are making it harder.”

The steep rise in interest rates from 4.96 per cent for new loans in January 2023 to the current rate of 6.23 per cent meant, even without house price increases, Aussies would need an extra 15 per cent in their pay packets to purchase the same property at the start of this year.

But factoring in rising house prices, first-home buyers need between $20-$30,000 more in the kitty than 12 months ago, even to get a loan in traditionally affordable areas on the city fringe such as Logan and Ipswich.

Five-bedroom house at 58 Seagull Ave, Mermaid Beach sold for $4.1m

In Waterford West, a typical unit costs $335,715, up $80,241 or 31 per cent from last year. A buyer would need to earn $66,006 — $22,320 or 51 per cent more than in 2023 — to afford the apartment, with repayments in 2024 increasing about $600 to $1,650.

The income threshold also increased dramatically in Brisbane’s booming southern suburbs, with households requiring an extra $64,264 or 41 per cent to buy a house in Sunnybank Hills. House prices there jumped 23 per cent to $1.12m, translating into a minimum household income of $219,237 and repayments of $5,481.

At the top end of the market, an alarmingly fat pay cheque of between $517,444 and $581,111 — three times the average household earnings of $186,264 — is in order for a home in three blue-chip suburbs, New Farm in inner city Brisbane, and Sunshine Beach and Mermaid Beach, on the Sunshine and Gold Coasts.

Mansions in those exclusive enclaves are mostly traded in cash, among richlister owners including Gina Rinehart and Clive Palmer, along with identities such as TV’s Karl Stefanovic, former prime minister Kevin Rudd, and golfer Adam Scott.

Last year, no Queensland suburbs hit the $500,000 income bracket. In NSW, 93 suburbs claimed the dubious distinction, up from 53 at the start of 2023. Victoria rose from 4 to 7 and Western Australia from 1 to 2.

REIQ CEO Antonia Mercorella

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Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said “a perfect storm of extraordinary market conditions” had led to surging house prices and, consequently, declining rates of home ownership.

Queensland’s homeownership level of 63.5 per cent in 2021 was the lowest in the country and had deteriorated most among people aged between 25 and 39 as buyers faced “significant financial obstacles”, including a hefty initial deposit, stamp duty, and home insurance, she said.

“There is a generation of people out there who are disillusioned and feeling like they’re not able to realise the dream of home ownership. We also know there a lot of people who have fallen out of home ownership and would like to seek re-entry,” Ms Mercorella said.

This four-bedroom, one-bathroom unit at South Gladstone sold for $375,000

ABS data shows 35 per cent of people aged 25 to 29 owned a home in 2021, down from 53 per cent in 1971. Ownership declined from 63 to 49 per cent over the same period among those aged 30 to 34.

“A perfect storm of extraordinary market conditions has seen Queensland property prices rise at a much faster pace than we’re accustomed to,” Ms Mercorella said.

“The single largest driver of this growth has been the imbalance between supply and demand, which seems likely to continue applying upward pressure on prices.”

Buyers’ agent Oliver Dunstan, of Rose and Jones

Buyers’ agent Oliver Dunstan, of Rose and Jones, said a shortage of homes listed for sale in the most desirable areas meant vendors, in most cases, were still commanding top dollar for their properties despite a significant drop in buyers’ borrowing capacity.

“Most vendors haven’t been negatively impacted as the depth of buyers allows them to trade at the same or similar prices to what they may have achieved 12 to 24months ago, whereas some buyers need to adjust their expectations and potentially look at different locations or dwelling types,” Mr Dunstan said.

“When some of these sellers become buyers however, their expectations also need to shift as they may not be able to borrow as much as they could have, and low stock levels mean they will need to compete for quality property. Upsizing remains a tricky task for most in today’s market.”

This five-bedroom, four-bathroom home at 1 Sydney St, New Farm is for sale