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  1. Home
  2. Finance

This is how much you need to earn to buy a house in Australia right now

According to a new property analysis. - by Laura Barry
  • 08 Feb 2019
This is how much you need to earn to buy a house in Australia right now
Getty

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.

red for sale sign
Getty

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.

buying a house
Getty

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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Laura Barry
Laura Barry
Laura Barry is a writer, bookworm and interior design enthusiast with a love for reporting on all things homes, travel and lifestyle. When not tapping away at her keyboard, Laura can be found making endless cups of tea or perusing the shelves of Sydney’s many bookstores.

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YOU’LL NEED A WEDGE TO HANG THAT DOOR
Watch 6:32

YOU’LL NEED A WEDGE TO HANG THAT DOOR

{headline}

{headline}

4 signs that a property isn’t worth buying

4 signs that a property isn’t worth buying

3 ways to pay off your home loan faster

3 ways to pay off your home loan faster

The upfront costs that hit the hardest when buying a house

The upfront costs that hit the hardest when buying a house

5 legal ways to reduce your capital gains tax on investment property

5 legal ways to reduce your capital gains tax on investment property

{headline}

{headline}

How you can save money on your home loan by going green

How you can save money on your home loan by going green

This is how long it takes to save a home deposit in Sydney

This is how long it takes to save a home deposit in Sydney

The potential property hotspots for 2020

The potential property hotspots for 2020

{headline}

{headline}

The January 2020 changes all first home buyers need to know about

The January 2020 changes all first home buyers need to know about

Why you should reconsider hosting an open house inspection

Why you should reconsider hosting an open house inspection

The first mistake all first homebuyers make

The first mistake all first homebuyers make

How to know if a home isn’t worth the listed price

How to know if a home isn’t worth the listed price

Everything you need to know about container home designs

Everything you need to know about container home designs

Three things you should never do at an open house inspection

Three things you should never do at an open house inspection

The suburbs in Australia where it’s cheaper to buy than rent

The suburbs in Australia where it’s cheaper to buy than rent

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