Call for free independent agent advice
Your local agents ranked - see who's right for you
Home › Blog › Map: The Salary You Need to Buy In Each Australian City
If you’re looking for proof that Australia’s housing market is truly outrageous, this is it.
We’ve crunched the numbers to determine the annual salary needed to purchase the median-priced home in each of Australia’s capital cities, as well as in several inner city suburbs. The results may surprise you.
Our research suggests homebuyers need an annual salary of $73,500 to buy the median-priced home in Australia.
That’s in line with Australian Bureau of Statistics data that shows the average Australian earns just under $80,000 each year, though this figure is heavily skewed by a small number of high income earners.
While the national median house price and the average Australian annual earnings seem to add up, there’s a problem. The national median house price does not accurately reflect how much it costs to buy in some of Australia’s most in-demand locations.
As you can see from the map below, the annual salary needed to purchase a median-priced home varies from city to city.
The map shows, for example, that the average homebuyer has been all but pushed out of Sydney’s property market. How many individuals do you know who earn more than $106,000 per year?
What the map doesn’t show is that median house prices can also differ greatly between neighbouring suburbs.
Before we dissect the findings in detail, it might be useful to explain how we came up with the numbers.
Our calculations assume that a homebuyer:
We then researched median capital city and suburb house prices using Core Logic and realestate.com.au data, and used an online borrowing calculator to determine how much a buyer would need to borrow to purchase the median-priced home in each location.
This sum was adjusted to reflect the assumptions outlined above.
Hobart, Adelaide, Brisbane and Perth are the most affordable Australian capital cities for homebuyers.
To purchase the median-priced homes in these cities, homebuyers need an annual salary of less than $66,500. If you’re interested in moving across the Bass Strait and buying the median-priced home in Hobart, you’ll need an average annual salary of just $49,000.
HobartMedian house price: $347,000Salary required: $49,000
AdelaideMedian house price: $430,000Salary required: $57,100
BrisbaneMedian house price: $487,000Salary required: $62,900
PerthMedian house price: $525,000Salary required: $66,500
Unfortunately, not all Australian capital cities are as affordable as Hobart.
As you might expect, Canberra and Melbourne are at the higher end of the scale, with median-priced homes in these cities requiring annual salaries of $73,300 and $75,400 respectively.
Darwin, propelled by large-scale mining and infrastructure projects, isn’t far behind. Homebuyers need an annual salary of $72,500 to buy in Australia’s most northern city.
DarwinMedian house price: $585,000Salary required: $72,500
CanberraMedian house price: $590,000Salary required: $73,300
MelbourneMedian house price: $615,000Salary required: $75,400
With houses regularly selling for over $1 million, it will surprise few that Sydney has some of the least affordable homes in the country.
Homebuyers need to earn at least $106,000 to afford Sydney’s median priced home – and a lot more if they want to buy in more prestigious suburbs.
SydneyMedian house price: $900,000Salary required: $106,000
You already need a six-figure salary to afford the median-priced home in Sydney. But if you thought that was out of reach for most Australians, wait until you hear how much it costs to buy in the inner city.
Melbourne homebuyers need to be in the second-highest tax bracket or above (earning at least $138,200 per year) to afford the median-priced home in inner city suburbs like Fitzroy.
In Sydney, homebuyers need an annual salary of $235,000, or over three times the average annual Australian wage, to afford to buy the median-priced home in Bondi Beach.
And that’s not the worst of it.
Prospective homeowners need an annual salary of $1,169,000 – over fifteen times the average salary – to afford the median-priced home in Point Piper.
To put that into perspective, fewer than 0.1 per cent of Australians make more than $1,169,000 per year. In fact, someone at the lower end of Australia’s top 0.1 per cent earns just $600,625. That’s over $550,000 short of what’s required to afford for the median-priced Point Piper home.
9. Redfern, NSWMedian price: $1.18 millionSalary required: $135,200
8. Forest Lodge, NSWMedian price: $1.181 millionSalary required: $135,200
7. Fitzroy, VICMedian price: $1.206 millionSalary required: $138,200
6. Camperdown, NSWMedian price: $1.26 millionSalary required: $143,900
5. Surry Hills, NSW Median price: $1.33 millionSalary required: $152,500
4. Chippendale, NSW Median price: $1.33 millionSalary required: $152,000
3. Darlinghurst, NSWMedian price: $1.43 millionSalary required: $162,000
2. Bondi Beach, NSWMedian price: $2.002 millionSalary required: $235,000
1. Point Piper, NSWMedian price: $9.4 millionSalary required: $1,169,000
Reflecting on Productivity – Crucial Property Price Driver
Avoid Sydney’s Slump – Australian Property Market Forecast 2018
Reach out to one of our knowledgeable team members below.
If you would like to be introduced to a top buyer’s agent to help with finding and securing your next property fill out the below form and we will be in touch to quickly understand what you’re looking for and to put forward a couple free suggestions.
If you are thinking of selling your property, we can also introduce you to a top selling agents, click here to find out more.
