With property prices increasing, or in some cases declining, at vastly different rates over the last two years, each Australian capital city requires varying incomes to purchase property.
Adding to the complexity, even suburbs within the same city need varying income levels to make homeownership possible. Then there’s the property type itself, with what you can buy depending heavily on your earnings.
Here’s a look at how much you’ll need to become a homeowner in each of Australia’s capitals.
Sydney
Still the country’s most expensive city for housing, Sydney’s house prices rose 7.8% in the 12 months to June, according to Domain, while unit prices grew 2.8%.
As a result, the income required to buy property in much of Sydney has increased.
First, it’s helpful to know that according to Australian Bureau of Statistics data, the average full-time income in New South Wales as of May 2024 was $100,656.
According to Canstar and Domain research, almost all suburbs in Sydney require an annual six-figure income for a single person to purchase a unit or house. This assumes the buyer had a variable-rate mortgage with 6.28% interest over 30 years and a 20% deposit.
There are a handful of SA4 regions where buyers purchasing on their own would be able to afford a unit in the city on an income of less than $100,000. These include the Outer South West at $99,000 annual income and the South West at $95,000. (An SA4 is a term used by the Australian Bureau of Statistics to refer to a specific type of geographical area. In cities, SA4s tend to have populations of 300,000 to 500,000 people.)
For houses, the SA4s requiring the lowest income for a single buyer are the Central Coast at $157,000, the Outer West and Blue Mountains at $160,000 and the Outer South West at $163,000.
For those buying with a partner or friend, things are easier. Houses in these SA4s can be bought with an income of less than $100,000 each:
As the table below shows, units in almost all SA4s in the Sydney area would require an income of less than $100,000 per person.
Melbourne
Melbourne’s property market has lagged behind other major capitals over the last two years. House prices rose 3.6% in the 12 months to June but declined 0.2% for units according to Domain.
As a result, there are a handful of SA4s that are more affordable when compared to other major capitals. As the table below shows, the income required to purchase a unit in Melbourne is generally lower than in Sydney.
But, the house market is tougher to enter than some locations in Sydney, with the average income required for a person buying a house on their own reaching above $100,000 in all SA4s.
By comparison, the average annual income in Victoria in May 2024 was $97,864
Brisbane
In mid-2024, Brisbane overtook Melbourne to become the country’s second-most expensive capital. House values rose 16.9% in the 12 months to June, while unit values rose 18.7%, according to Domain.
The Greens commissioned the federal Parliamentary Library to conduct an affordability assessment in March 2024. They found that the average buyer in Brisbane would need to earn around $178,090 to afford a house and $118,511 to afford a unit.
According to the ABS, the average annual income in Queensland was $98,852.
Adelaide
Like Brisbane, Adelaide’s home values have soared, climbing 16.0% year-on-year for houses and 15.0% for units, according to Domain.
The average annual income required to buy a house in the South Australian capital is $163,627 and $108,149 for a unit. This has almost doubled over the last four years. Meanwhile, the average annual income in SA was $92,399, making it challenging for many to afford a median-priced home.
Perth
Prices rose 23.8% year-on-year to June for houses and 25.5% for units, according to Domain.
As a result, the average income required to buy a home in Perth has also grown, with single buyers now needing $140,313 to buy a house and $94,981 to buy a unit.
The average annual income in Western Australia was $108,903 in May 2024.
Darwin
Similar to Melbourne, Darwin’s home values have stagnated over the last year, declining 9.8%% year-on-year for houses and 2.6% for units, according to Domain.
The Parliamentary Library research showed that single-income buyers would need an annual income of $124,339 to buy a house and $83,648 to buy a unit. However, the average annual income in the Northern Territory was $95,891.
Alternative ways to buy a home
You don’t always need a large deposit and monthly income to become a homeowner. Here are a few strategies that might help you achieve your property goals sooner.
Are you interested in finding out more about your home loan options? Call Shore Financial on 1300 416 700, email us on info@shorefinancial.com.au or fill in this online form.
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