It’s no surprise that Australia’s current property prices are pushing many would-be first home-buyers out of the market, but new research by Canstar has found that the situation is affecting more than just those who live in the big cities.
While the housing market problem seems centralised to the big cities, Canstar’s data shows that mortgage repayments are increasingly unaffordable across the country, especially once you consider the average Australian is only earning between $55,000 and $85,000 a year, many families are living with mortgage stress.
Mortgage stress is when a person or family are paying more than 30 per cent of their income to housing repayments.
New data obtained by Canstar’s most recent property analysis, which was completed in January 2019, has found that the median price for a detached house on the lower end of the property market in Sydney still costs around $1 million dollars. If you’re an individual looking to buy you’ll need to be earning a single wage of at least $160,000 a year, before tax, as well as pay the full 20% up-front deposit, if you want to avoid mortgage stress. That’s the equivalent pay for a paediatrician or an MP.
In Melbourne where the median house price is around $737,000, an individual would need to be earning in excess of $112,000 a year to comfortably pay off a mortgage.
Canstar created a handy table to show just how challenging it is for the average Australian to not only get a start on the property ladder, but to pay off a home loan too. These figures below indicate how much you would need to be earning to pay off the cost of a home without experiencing mortgage stress, assuming you paid a 20 per cent deposit.
How much do you need to earn to buy a house in Australia?
$1,000,000 – annual salary of $160,611
$800,000 – annual salary of 128,395
$700,000 – annual salary of $112,363
$600,000 – annual salary of $96,526
$500,000 – annual salary of $80,439
$400,000 – annual salary of 64,401
These figures are especially daunting when you consider the 20 per cent deposit for ranges from 80K to $200K.
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