How much you need to earn to buy a home in each Sydney suburb in 2024

New research has revealed how much Sydneysiders need to earn to buy a home in each and every suburb in the Harbour City.

Home buyers now need to earn more than $200,000 a year to be able to afford the average Sydney property – a $40,000 rise from last year, alarming new analysis shows.

Those wanting to purchase freestanding houses within middle- and inner-ring suburbs will need to earn substantially higher, according to the analysis of lending data and prices.

About half the suburbs within a 30km radius of the CBD had median house prices that required a minimum household income of $400,000 or more to pass the affordability tests necessary for a loan.

This assumed the buyer bought at the median price and used a 20 per cent deposit on a 30-year loan at an interest rate of 6.23 per cent – the typical rate being offered by lenders at the moment.

The research from comparison group Finder has laid bare the devastating effect of property price hikes and record increases in interest rates over the last year.

It showed that the income required to purchase an average Sydney dwelling increased 10 times faster than average wage growth.

The cheapest suburb within 30km of the CBD, Villawood, was considered only affordable for house buying households that earned more than about $180,000.

The cheapest suburb for unit buyers across the city as a whole was Carramar in the Parramatta area, which required a minimum income of about $79,000.

There were only 20 other suburbs where units were affordable for those earning less than $100,000 a year.

At this time last year, when the average lender rate was 4.96 per cent and prices were lower, a unit buyer earning less than $100,000 would have been able to afford a purchase in 54 suburbs.

Buying a unit in Carramar, Sydney’s cheapest suburb, requires a minimum household income of about $80,000 a year.

Finder.com.au head of consumer research Graham Cooke said home seekers were getting squeezed by a mix of rising interest rates and soaring home prices.

These two forces were increasing the income required to purchase homes to new extremes, he said.

“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.”

Mr Cooke added that the banking climate was proving 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.

“It’s difficult to track, but there’s anecdotal evidence that banks are making it harder (to get loans).”

Many of the first homebuyers who purchased properties in the last year were more often getting help from their parents than seeing dramatic increases in their incomes, Mr Cooke said.

Some home seekers’ parents were sitting on large amounts of equity in their properties, which was often being channelled into the purchases of their adult children, he said.

“If you’ve grown up with property owning parents, you’re going to be more privileged when it comes to buying,” Mr Cooke said.

Mortgage Choice broker James Algar said it had become next to impossible for most home seekers to purchase properties on their own.

“Having a partner has become critical,” he said, noting that single purchasers whose earnings matched a couple’s dual income would get taxed more, making their take home pay lower.

“Stage 3 tax changes will make a difference here,” Mr Algar said.

“Often we find that (single) buyers use funding from an inheritance or something like that and use a smaller loan.

Rafi Ekmekdjian, with wife Elizabeth and daughter Christina, sold their Condell Park home for a record price but struggled to find their next home. Picture: Jonathan Ng

“Even someone with a salary of $200,000 a year, it doesn’t open as many doors as you’d think. For someone earning less than that, it’s bloody hard buying something on your own.”

Most first homebuyers coming into Mr Algar’s office seeking loans were now about 40, he said. “Those who purchase much younger tend to always have bank of mum helping them.”

Rafi Ekmekdjian was on the hunt for a new home last year and will finally be moving in this month. He said finding something he was willing to buy at a price he could afford was a challenge.

“I was searching for one year. A lot of the houses were in bad condition. I didn’t like most of them. I nearly gave up. Then something just happened.”

He added that he was surprised how frantic the market was given how much prices and rates had increased.

His family saw this when they listed their previous Condell Park home for sale through McGrath agent George Kapos and got an offer for a price that set a new suburb record.

“It was on the market one week. We never expected it to sell so quick. The couple who bought it had been searching for a year.”