Earnings vs House Prices

Buying a house is one of the most important and expensive decisions we make in our lives so here at Victory, we wanted to crunch the numbers and see where in Australia you need to earn the most (and least) to buy a home. 

 

AHURi (Australian Housing and Urban Research Institute) recommends that housing costs should be no more than 30% of our income. So, to work out how much we need to be earning we took the average house price in 49 of Australia’s most popular locations and worked out the mortgage repayments based on having a 20% deposit and taking a 30-year loan with a 2.48% interest rate. Next, we divided this figure by 0.30 to show the monthly salary a homeowner would need to buy in a location. 

 

Map showing the most and least affordable locations to buy a house in Australia

 

The most expensive place to buy a home in Sydney, where the average monthly mortgage payment is an eye-watering $3,373, making that an annual sum of $40,480! If a person living in Sydney was to only spend the recommended 30% of their household income on their mortgage repayments they would have to earn $134,934.

 

Overview of the least affordable locations to buy a house in Australia

 

On the other end of the spectrum, the most affordable place to buy a home in Australia is Boulder where the average house price is $165,667. The average household income needed to afford the monthly mortgage payments of $522 is just $20,892. More than $100,000 less than that needed to buy a home in Sydney!

 

Overview of the most affordable locations to buy a house in Australia

 

Interestingly out of 49 areas we gathered data for, only three places need more than the average salary in Australia ($89,122) to buy a home which was Sydney, Geelong, and Brisbane. The full data breakdown is below:

 

 

Sources: 

https://www.ahuri.edu.au/research/ahuri-briefs/understanding-mortgage-stress

www.livingin-australia.com/salaries-australia/

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