Melbourne housing affordability: alarmingly low number of suburbs that solo buyers can afford

Melbourne singles have been squeezed out of almost every corner of the city, with just a handful of areas within reach of an average solo-income earner. See where you can still buy for under $400k.

Nathan Mawby

@mrmawby

5 min read

February 24, 2025 - 7:26AM

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Melbourne singles have been squeezed out of almost every corner of the city, with just four suburbs left within reach of an average solo-income earner.

New research from Compare the Market shows only units in Melton, Melton South, Notting Hill and Carlton, where the median price is typically kept low by a high prevalence of student accommodation, still have prices affordable to those who haven’t partnered up.

It equates to just 1.01 per cent of Melbourne suburbs being within their reach.

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But couples, or friends and family who team up to pursue a home with an average dual-income, have their choice of a hefty 240 suburbs around the city, more than 60 per cent of the total assessed.

The Compare the Market research took the $1400 a week typical Victorian single-income and contrasted it with the repayments needed for median home prices purchased with a 20 per cent deposit.

16/4 Austin Place, Melton South is a three-bedroom unit that is on the market for $395,000-$420,000

It ruled out any suburbs where the mortgage would cost more than 30 per cent of the average salary, as this is widely considered to be mortgage stress.

Property expert Andrew Winter said the big issue for singles was that wage growth had not kept pace with home values in the past five years, meaning most would now be stretched to breaking point by monthly mortgage repayments — even if they managed to save a deposit for a home.

For many singles it might make more sense to look at a nearby regional town, though Mr Winter said if they had any concerns about how they would cope with a lengthy commute it could be wiser to “rentvest”.

“Buying where you can afford and renting where you actually want to live is becoming a much more popular entry point for first-time buyers,” he said.

2/11-13 O'Neills Rd, Melton is a two-bedroom unit on the market for $369,000-$389,000.

“The other trend I think we’re going to see is single people teaming up with siblings and even friends to achieve their property dreams.”

Those who buddy up to buy not only increase their wage base, they also get more preferential lending from banks who spread living cost calculations across two people — meaning a boost to borrowing power.

Moneycat Finance chief executive Evan Davis has noted a rise in siblings and friendship groups making moves on homes together as “non-traditional” partnerships to get a step up on the property ladder

“But that can be quite complex when it comes to ‘decoupling’ at the other end,” Mr Davis warned.

The majority of singles he encounters now are above-average income earners, have some sort of financial assistance from their parents, and are still buying a cheaper apartment in a large complex rather than a villa unit or flat in a walk-up building.

Despite this, Mr Davis said that after two years of home value falls, those who did want to buy a home solo would have out saved the market in the past two years and be looking at their best chance to buy a home as a single in 20 years — though the opportunity was limited after the Reserve Bank cut interest rates this week, which historically causes rapid upticks.

“Relatively quickly you see a lot of blood in the water and the property market starts to take off at a scary speed,” he said.

A one-bedroom apartment at 820/528 Swanston St, Carlton has a $238,000 asking price.

“I suspect there is still a window before that confidence will increase, but by the time we have the next rate cut the market will be quite energetic.”

While Mr Winter said he did not believe this week’s interest rate cut would raise Melbourne’s property market to “fever pitch” as last seen during the pandemic, however those hoping to break into the market would need to get the best interest rate they could get in order to remain competitive as buyer confidence rose this year.

“Even for those lucky enough to own a home, the ongoing costs are often a killer if you’re not savvy about your interest rate,” Mr Winter said.

He advised buyers to do their due diligence, even down to exploring local crime maps and whether the clientele of the pub nearby are well behaved on a Friday night.

Prominent buyer’s advocate Cate Bakos said the data was “depressing”, and reflected the significant issues with housing affordability in Melbourne.

“And a lot of these people won’t be able to live in Melton, because of where they work,” Ms Bakos added.

32/109 Lygon St, Carlton has a $155,000-$165,000 asking price.

However, the buyer’s agent noted that being single didn’t mean the homeownership dream was dead as she was still regularly working with solo buyers — some with annual incomes as low as $80,000.

While some bought homes for as little as $440,000, that could often be a nice two-bedroom apartment in Footscray, Ms Bakos said.

“So it’s not like you need to feel defeated,” Ms Bakos said.

“If you look hard enough, you won’t be restricted to those four suburbs.”

For those wanting to make home ownership a reality without partnering up, she said it was important to remember the Compare the Market figures were calculated on median prices and that half the homes sold in any suburb changed hands for less than that figure.

While getting a hand from family or parents, even just to guarantee a loan, could make a big difference for solo buyers, she noted some still did so without that support.

“For a lot of these buyers, they are not looking at this as their forever home — and know that the earlier they can buy, the better it is long term,” Ms Bakos said.

Others were also taking the view that purchasing a two-bedroom home and renting the second room out to a house mate could help them extend themselves to purchase a property that on paper would put them in mortgage stress.