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Housing in Australia: What does the average income in your city buy you

Sep 12, 2017
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House prices continue to slide in Australia, with the market recently hit by the steepest annual fall in 15 years.

But a comparison of the country’s average annual income against median house prices in our capital cities has revealed buyers trying to crack into their local market still face a major uphill battle.

Almost a third of the country’s borrowing owner-occupied households are living with mortgage stress, research has suggested.

That means more than one million households are spending more than 30 per cent of their income on home loan repayments.



The ABS estimates the national earning average for a full-time adult worker to be around $82,400 a year.


To avoid mortgage stress, a person earning this income could borrow around $450,000 - a number that falls short of Sydney's $900,000 median house price or Melbourne's average of $740,000.

Sarah Tindall, Research Director at RateCity.com.au, said single dwellers will struggle to buy.

"Unless you have huge savings, and a huge income, then buying in our two biggest cities will be largely out of reach for singles," said Ms Tindall.

For buyers in Perth and Adelaide, however, the latest median home price figures show the average annual income provides a more realistic path into the housing market.

Avoiding mortgage stress, here’s what an average Australian’s income will actually buy them in their local property market.

SYDNEY

Despite Sydney house prices falling 9.7 per cent in the last year, the city’s median house price still sits above $900,000, according to the latest CoreLogic data.

With an average full-time income of around $83,600 in NSW, a single Sydneysider could borrow around half the median price and avoid mortgage stress.

Breaking that down, if a person earning the state’s average took out a home loan at 4.5 percent for 30 years, they could borrow roughly $412,500.

Assuming they were in a position to pay a 10 per cent lump sum deposit and cover the cost of stamp duty, that would allow for a spend of $450,000 on a home.


(Nine)

MELBOURNE

Victorians have a bad record when it comes to spending beyond their means, with more than 200,000 home owners in the state living in mortgage stress.

Buyers in Melbourne have seen some slight relief with real estate prices dropping 8.3 per cent in the last 12 months.

However, the city’s median house price of $740,425 is likely to still be out of reach for many in the state, with Victorians earning an average of just over $80,400 a year for full-time work.

This translates into an affordable property purchase of around $441,000. Based on median prices for Melbourne’s suburbs, it’s also likely to translate into a commute of at least 40 minutes.


(Nine)

BRISBANE

Experts are predicting good news for Brisbane home owners, projecting market growth in 2019, in part thanks to a number of people moving to the Sunshine State to find more affordable housing.

At the height of the 2017 housing boom in Sydney, it is estimated over 51,000 residents migrated from NSW to Queensland.

Property analyst Eliza Owens indicated that while this in part drives demand and prices, it’s not all bad.

"Many are still migrating to Sydney and Melbourne from smaller cities for employment opportunity." Ms Owens said.

For Brisbane buyers, an affordable house based on the state’s average $80,000 full-time income is still $100,000 lower than Brisbane’s median house price of $540,750.


(Nine)

ADELAIDE

South Australians have the second-lowest earnings in the country behind Hobart.

The average income for all employees, including part-time workers, is just under $56,000 a year, making a house purchase of $300,000 an affordable option. For full-time employees, this jumps to over $440,000 off the back of an average income of $75,290.

This is good news for buyers in the City of Churches as it falls within the city's overall median home price of $430,711.

Median unit prices in Adelaide are much lower than Sydney and Melbourne, making living close to the CBD, or in popular coastal suburbs like Henley Beach a feasible choice.


(Nine)

PERTH

With full-time workers earning an average of $1743 a week, West Australians have the highest income in the country.

That works out to an income of more than $90,000 a year, which allows for a property splurge of just under $500,000.

Against a median house price of $465,120 in Perth, and a median unit price closer to $363,000, residents of the state’s capital have many more affordable options than their east-coast counterparts.



DARWIN

Prices in Darwin stabilised during the second half of last year, with a house in the Top End’s capital setting you back $502,000 on average. This is just slightly more than what the average Territorian can afford to buy, with the state’s average income permitting a purchase of around $476,000. Unit prices, however, average around $300,000 in Darwin, making apartment living an affordable possibility.

HOBART

Hobart saw the biggest rise is house prices last year, with CoreLogic revealing 7.4 per cent growth.

Tasmanians have the lowest average earnings in the country, with full-time workers taking home $71,620 a year. That allows for a $392,500 property purchase - $100,000 shy of Hobart’s median house price of $494,810.

The affordable purchase figure drops to just over $295,400 when you take into account the state's casual and part-time workers, who earn an average of $53,880 a year.

Hobart has seen what Eliza Owen describes as ”a ‘spillover’ of growth”, where investors who have been pushed out of bigger cities outbid locals interstate.

‘House prices have risen… house rents are up… and the number of rental vacancies across the city are down to just over 100 dwellings as landlords seek higher rents or utilise Airbnb for their property’.

AVOIDING MORTGAGE STRESS

Although out-of-cycle hikes and low wages growth could put more people in danger of mortgage stress, Ms Tindall said ‘banks are lending more prudently’.

But if yesterday's damning banking royal commission findings don’t limit excessive lending, there are some things borrowers can do to prevent mortgage stress.

Ms Tindall warns buyers not to overstretch the budget from the outset and ensure they leave money in reserve for emergencies. She also says it’s important to question a rate hike.

"If your bank lifts your interest rate, then don’t take it laying down."

She says ‘do your homework’ and shop around for a chance to save money and consider refinancing to a more competitive rate.

https://finance.nine.com.au/2019/02...lbourne-brisbane-perth-hobart-darwin-canberra


What do you guys think? House prices are falling in Australia but still very sexpnsive.
 

manga

FULL MEMBER
Jul 6, 2018
1,308
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1,328
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India
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India
I heard agriculture land is dirt cheap in australia. Available in 100's and 1000's of acres.
Some indians have sold there 3-5 acres land in india and baught in multiple of 100's of acre in australia.
 

srshkmr

FULL MEMBER
Apr 12, 2013
1,191
-1
946
Country
India
Location
Australia
House prices continue to slide in Australia, with the market recently hit by the steepest annual fall in 15 years.

But a comparison of the country’s average annual income against median house prices in our capital cities has revealed buyers trying to crack into their local market still face a major uphill battle.

Almost a third of the country’s borrowing owner-occupied households are living with mortgage stress, research has suggested.

That means more than one million households are spending more than 30 per cent of their income on home loan repayments.



The ABS estimates the national earning average for a full-time adult worker to be around $82,400 a year.


To avoid mortgage stress, a person earning this income could borrow around $450,000 - a number that falls short of Sydney's $900,000 median house price or Melbourne's average of $740,000.

Sarah Tindall, Research Director at RateCity.com.au, said single dwellers will struggle to buy.

"Unless you have huge savings, and a huge income, then buying in our two biggest cities will be largely out of reach for singles," said Ms Tindall.

For buyers in Perth and Adelaide, however, the latest median home price figures show the average annual income provides a more realistic path into the housing market.

Avoiding mortgage stress, here’s what an average Australian’s income will actually buy them in their local property market.

SYDNEY

Despite Sydney house prices falling 9.7 per cent in the last year, the city’s median house price still sits above $900,000, according to the latest CoreLogic data.

With an average full-time income of around $83,600 in NSW, a single Sydneysider could borrow around half the median price and avoid mortgage stress.

Breaking that down, if a person earning the state’s average took out a home loan at 4.5 percent for 30 years, they could borrow roughly $412,500.

Assuming they were in a position to pay a 10 per cent lump sum deposit and cover the cost of stamp duty, that would allow for a spend of $450,000 on a home.


(Nine)

MELBOURNE

Victorians have a bad record when it comes to spending beyond their means, with more than 200,000 home owners in the state living in mortgage stress.

Buyers in Melbourne have seen some slight relief with real estate prices dropping 8.3 per cent in the last 12 months.

However, the city’s median house price of $740,425 is likely to still be out of reach for many in the state, with Victorians earning an average of just over $80,400 a year for full-time work.

This translates into an affordable property purchase of around $441,000. Based on median prices for Melbourne’s suburbs, it’s also likely to translate into a commute of at least 40 minutes.


(Nine)

BRISBANE

Experts are predicting good news for Brisbane home owners, projecting market growth in 2019, in part thanks to a number of people moving to the Sunshine State to find more affordable housing.

At the height of the 2017 housing boom in Sydney, it is estimated over 51,000 residents migrated from NSW to Queensland.

Property analyst Eliza Owens indicated that while this in part drives demand and prices, it’s not all bad.

"Many are still migrating to Sydney and Melbourne from smaller cities for employment opportunity." Ms Owens said.

For Brisbane buyers, an affordable house based on the state’s average $80,000 full-time income is still $100,000 lower than Brisbane’s median house price of $540,750.


(Nine)

ADELAIDE

South Australians have the second-lowest earnings in the country behind Hobart.

The average income for all employees, including part-time workers, is just under $56,000 a year, making a house purchase of $300,000 an affordable option. For full-time employees, this jumps to over $440,000 off the back of an average income of $75,290.

This is good news for buyers in the City of Churches as it falls within the city's overall median home price of $430,711.

Median unit prices in Adelaide are much lower than Sydney and Melbourne, making living close to the CBD, or in popular coastal suburbs like Henley Beach a feasible choice.


(Nine)

PERTH

With full-time workers earning an average of $1743 a week, West Australians have the highest income in the country.

That works out to an income of more than $90,000 a year, which allows for a property splurge of just under $500,000.

Against a median house price of $465,120 in Perth, and a median unit price closer to $363,000, residents of the state’s capital have many more affordable options than their east-coast counterparts.



DARWIN

Prices in Darwin stabilised during the second half of last year, with a house in the Top End’s capital setting you back $502,000 on average. This is just slightly more than what the average Territorian can afford to buy, with the state’s average income permitting a purchase of around $476,000. Unit prices, however, average around $300,000 in Darwin, making apartment living an affordable possibility.

HOBART

Hobart saw the biggest rise is house prices last year, with CoreLogic revealing 7.4 per cent growth.

Tasmanians have the lowest average earnings in the country, with full-time workers taking home $71,620 a year. That allows for a $392,500 property purchase - $100,000 shy of Hobart’s median house price of $494,810.

The affordable purchase figure drops to just over $295,400 when you take into account the state's casual and part-time workers, who earn an average of $53,880 a year.

Hobart has seen what Eliza Owen describes as ”a ‘spillover’ of growth”, where investors who have been pushed out of bigger cities outbid locals interstate.

‘House prices have risen… house rents are up… and the number of rental vacancies across the city are down to just over 100 dwellings as landlords seek higher rents or utilise Airbnb for their property’.

AVOIDING MORTGAGE STRESS

Although out-of-cycle hikes and low wages growth could put more people in danger of mortgage stress, Ms Tindall said ‘banks are lending more prudently’.

But if yesterday's damning banking royal commission findings don’t limit excessive lending, there are some things borrowers can do to prevent mortgage stress.

Ms Tindall warns buyers not to overstretch the budget from the outset and ensure they leave money in reserve for emergencies. She also says it’s important to question a rate hike.

"If your bank lifts your interest rate, then don’t take it laying down."

She says ‘do your homework’ and shop around for a chance to save money and consider refinancing to a more competitive rate.

https://finance.nine.com.au/2019/02...lbourne-brisbane-perth-hobart-darwin-canberra


What do you guys think? House prices are falling in Australia but still very sexpnsive.
I am planning to buy house in Melbourne around Preston the average cost is 600k (500m2). One my friends house in South Morang rose to 700k from 600k (672m2). The prices are going up i think.
 
Sep 12, 2017
3,065
-3
2,330
Country
Australia
Location
Australia
I am planning to buy house in Melbourne around Preston the average cost is 600k (500m2). One my friends house in South Morang rose to 700k from 600k (672m2). The prices are going up i think.
The housing markets is funny at the moment, I keep hearing the market is going down.
 

Cherokee

SENIOR MEMBER
Jul 5, 2012
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I am planning to buy house in Melbourne around Preston the average cost is 600k (500m2). One my friends house in South Morang rose to 700k from 600k (672m2). The prices are going up i think.
The housing markets is funny at the moment, I keep hearing the market is going down.
If you are planning to buy hold off till late 2020 . Property prices in Sydney and Melbourne are falling and will continue to do so.
 

srshkmr

FULL MEMBER
Apr 12, 2013
1,191
-1
946
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Australia
The housing markets is funny at the moment, I keep hearing the market is going down.
If you are planning to buy hold off till late 2020. Property prices in Sydney and Melbourne are falling and will continue to do so.
I keep hearing the same but the prices in the neighborhood are going up. Maybe they will get down after the extending metro connection and creation of new suburbs? .. I will hold to buy the house. :) Time to buy a farmland in India i guess ;)
 
Sep 12, 2017
3,065
-3
2,330
Country
Australia
Location
Australia
I keep hearing the same but the prices in the neighborhood are going up. Maybe they will get down after the extending metro connection and creation of new suburbs? .. I will hold to buy the house. :) Time to buy a farmland in India i guess ;)
Prices in the West of Melb will go up because of the underground Metro to the airport, new roads etc.
 

Cherokee

SENIOR MEMBER
Jul 5, 2012
6,722
-15
13,178
Country
India
Location
Australia
I keep hearing the same but the prices in the neighborhood are going up. Maybe they will get down after the extending metro connection and creation of new suburbs? .. I will hold to buy the house. :) Time to buy a farmland in India i guess ;)
Haha yeah better idea on India :D .

 

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