Home ownership could be all but impossible for many young Australians, as new research reveals that an average household needs an annual income of more than $300k to afford a median home.
The damning report looked at more than 22,000 listings across Australia and determined that home ownership was “out of reach” for the average Australian in a market that “has become a fortress for the rich”. Sydney’s northern beaches was the most unaffordable area in the country, with homes demanding an income of $600,000. Melbourne’s inner-east required a salary of $428,000 and Brisbane’s south $330,000.
The average household currently takes home less than $100k annually.
Speaking on the report, Suburbtrends Chief Analysist Kent Lardner said the housing market was in a state of “societal crisis” that was “eroding the middle class and widening inequality”.
“This report is an urgent wake-up call, emphasising the need for innovative solutions to ensure that the Australian housing market remains a realm of opportunity, not a bastion of exclusivity,” he said.
“This isn’t merely about numbers, it’s about the erosion of the Australian dream. Homeownership is slipping out of reach for average earners.”
Lardner said multiple approaches were needed to tackle the issue, and the government couldn’t simply subsidise home ownership.
“It’s crucial that we not only increase supply but also address the core problem of house prices relative to income,” he said.
“Strategies that worsen this metric could lead to greater pain in the long term. We need solutions that ensure sustainable affordability in the housing market.”
He said the government needed to address urban development rules and land supply constraints as well as working to grow incomes.
The report joins a number of voices calling on policymakers and industry leaders to urgently address the crisis. The Greens have accused the government of “betraying renters”, and housing organisations such as Everybody’s Home have said that “the federal government must seize the opportunity to create generational, systemic change”.
They say without changes, homelessness will rise and many Australians will become lifelong renters in a “housing system that works against them.”
Ultimately, they say, one million new homes need to be built in the next 20 years.
How much money you need to buy a home in each state
New South Wales
Most expensive – Sydney Northern Beaches, $600,000 p.a
Least expensive – New England and North West, $148,000 p.a
Most expensive – Melbourne Inner East, $428,833 p.a
Least expensive – North West, $129,833 p.a
Most expensive – Brisbane South, $330,000 p.a
Least expensive – Queensland, Outback, $90,000 p.a
Most expensive – Adelaide, Central and Hills, $278,833 p.a
Least expensive – South Australia, Outback, $88,167 p.a
Most expensive – Perth, Inner, $210,000 p.a
Least expensive – Western Australia Outback (South), $111,667 p.a
Most expensive – Hobart, $225,167 p.a
Least expensive – West and North West, $146,667 p.a