What you need to earn to buy in every Geelong suburb

An after-tax income of more than $150K is now needed to buy, and own stress-free, in a dozen towns and suburbs across the Geelong region. See what you need to earn to buy where you want.

39 Russell St, Newtown, is being offered at auction with a $1.15m to $1.25m price guide.

An after-tax income of more than $150,000 is now needed to buy and service a mortgage stress-free in a dozen towns and suburbs across the Geelong region.

And of those, six housing markets are only open to buy with an annual household income of more than $200,000, and one over $300,000 after they’ve paid tax, exclusive research by Finder and CoreLogic has revealed.

The data shows an annual household income of more than $100,000 was needed in 36 housing and unit markets.

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Nine suburbs required less than $100,000 to buy a house and service a mortgage, while 16 unit markets (representing all but two included in the research) were open to buyers earning less than $100,000.

Housing affordability nationally has plummeted to its worst level on record.

CoreLogic research director Tim Lawless said “the gap between income and prices has never been this large”.

A household needs to earn $306,751 annually after tax to buy a typical house in the holiday hot spot of Fairhaven, with Aireys Inlet not far behind at $280,565, according to Finder and CoreLogic.

The required earnings for Newtown are $183,570, while $140,000-$150,000 is needed in Fyansford, Wandana Heights, Manifold Heights and Highton.

The research assumes a household has a 20 per cent deposit, will have a 30-year mortgage at the average owner-occupier discounted variable rate of 3.45 per cent, and will avoid mortgage stress with repayments costing no more than 30 per cent of monthly income.

12 Lialeeta Rd, Fairhaven sold for $5m at auction in December.

A typical house in Geelong’s cheapest suburb, Norlane, is achievable for a household earning $70,436 annually, with Corio ($72,010), Whittington ($83,809), Lovely Banks ($84,550) and St Albans Park ($86,470) the next most achievable suburbs.

Market pundits have already predicted units, apartments and townhouses will become more desirable in 2022 as market values continue to climb.

The research shows buyers considering that option are on the money, with an earnings differential of tens of thousands in areas such as Belmont, where a house (at $114,000) requires almost double a unit ($79,000).

17 Gambier Grove, Corio is on the market with $419,000-$459,000 price hopes.

Housing costs grew annually at double the rate of wage increases over the past 10 years and a typical Aussie home was now close to eight times annual median household income, Mr Lawless said.

That meant first-home buyers faced more barriers to get into the market than their parents – even those who bought in the late 1980s, when interest rates were 17 per cent.

He said the biggest challenge for most buyers was coming up with high sums for deposits and stamp duty, while higher prices had left buyers more financially exposed despite interest rates being at record lows.

17 Wallaroo Way, Highton, was listed for sale this week with $1.03m-$1.09m price hopes.

Mr Lawless said Australia had a long way to go to tackle affordability.

“At the moment, we have a love affair with space … but we need to free up more town planning and allow for higher density in some areas,” he said.

“Outside of supply, better infrastructure planning is needed to connect those areas with more affordable housing with better essential services.”

The house at 24 George St, Belmont, is offered for auction with $800,000-$850,000 price hopes.

Finder senior editor of money Sarah Megginson said the economic environment had prompted many people to buy beyond their means.

“Interest rates are at an all-time low, but they’ll need to rise at some point, and unfortunately this means some Aussies are at risk of defaulting on their home loans,” she said.

“Ideally, you don’t want to spend more than 30 per cent of your salary on home loan repayments, but it’s good to give yourself a buffer for when rates inevitably rise.

2/2 Marjorie Ave, Belmont, is listed for sale with a price guide of $530,000 to $560,000.

“You can use a home loan calculator to find out how much your repayments might cost you if interest rates rise.

“Play around with the interest rate to see what would happen if rates went up 1 per cent or even 2 per cent, back to where they were pre-Covid.

“Could you afford it? If not, you might want to lower your property buying budget.”

Originally published as What you need to earn to buy in every Geelong suburb