Home » How much you really need to buy a home

How much you really need to buy a home

New research has revealed the stunning six-figure salary needed by Australians to buy a home comfortably.

Suburbtrends used the internationally recognised “median multiple”, which measures housing affordability by dividing the median house price by the gross median household income.

Having analysed more than 22,000 property sales — including both houses and units — across the country in the month of October, the researchers found that Australia’s median multiple is 9.1, meaning the median house is more than nine times pricier than the typical Aussie’s household income.

It is a figure far removed from the gold standard of 3.0, which is the median multiple that is generally considered to allow for broad homeownership across many income groups, rather than just among the rich.

“To attain the ‘affordable’ median multiple of 3.0, Australian households would need to earn an average income of $301,769, highlighting a market that favours the wealthy,” Suburbtrends’ report read.

The three least affordable regions in Australia were all in Sydney. Suburbtrends found that Northern Beaches residents needed an eye-watering annual income of $600,000 to meet a median multiple of 3.0.

In Baulkham Hills and Hawkesbury, that figure was $595,000 and, in Sydney’s Eastern Suburbs, it was $500,000.

The only regions were housing affordability was on par with Australia’s actual median income — about $95,000 per year — were the Queensland and South Australian outbacks.

Kent Lardner, the chief analyst at Suburbtrends, said housing affordability “is not just a financial issue, it’s a societal crisis”.

“This isn’t merely about numbers, it’s about the erosion of the Australian dream. Homeownership is slipping out of reach for average earners,” he said.

Mr Lardner warned that more Aussies would have to rely on the “bank of mum and dad”, but that could widen inequality.

“But if you don’t have access because you were born in the wrong postcode, or don’t have wealthy parents, then you’re increasingly being locked out entirely,” he explained.

“Because if you move into the rental market, good luck trying to save a deposit while you’re spending 31 per cent or more of your household income on rent.”

Mr Lardner warned strategies such as first homebuyer grants and shared equity schemes only amplified the problem by driving up house prices in the long term.

He urged the government to come up with a housing policy that balances supply and affordability.

“The government is focusing on supply, which is great, but we need to just insert one extra point which is affordable supply,” he said.

“Building houses or apartments that are $700000 plus doesn’t work, we need to be doing everything we can to build under $500000.”

Income needed in Australia’s most and least affordable regions

  • NSW
    • Sydney, Northern Beaches — $600,000
    • New England and North West — $148,333
  • Victoria
    • Melbourne, Inner East — $428,833
    • North West — $129,833
  • Queensland
    • Brisbane, South — $330,000
    • Queensland, Outback — $90,000
  • SA
    • Adelaide, Central and Hills — $278,833
    • South Australia, Outback — $88,167
  • WA
    • Perth, Inner — $210,000
    • Western Australia, Outback (South) — $111,667
  • Tasmania
    • Hobart — $225,167
    • West and North West — $146,667
  • ACT
    • Australian Capital Territory — $265,000
  • NT
    • Darwin — $163,333
    • Northern Territory, Outback $130,667