The Australian dream of owning a home is becoming increasingly elusive, especially for those on a single income.

A recent analysis by Finder, using CoreLogic's latest property data, paints a stark picture of the financial reality facing prospective homeowners across the nation.

The average house price in Australia now stands at a staggering $867,188, requiring a minimum household income of $171,223 per year to make the dream of homeownership a reality.

For those looking to purchase an average unit, priced at $610,789, the required household income is somewhat lower but still a hefty $120,598 annually.

This situation is particularly challenging given that the average full-time worker in Australia earns $98,218 per year, according to the Australian Bureau of Statistics (ABS).

This gap between earnings and the cost of housing means that for many Australians, the goal of owning a home remains just that—a goal, rather than an achievable milestone.

Owning a home on a single income in Australia is challenging, with a minimum household income of $171,223 needed to buy an average-priced house. Credits: Shutterstock

In Sydney, the situation is even more daunting. To afford an average home in this city, with prices around $1.3 million, a household would need to earn a minimum of $263,195 per year.

Even opting for a unit that costs an average of $755,000 requires a substantial income of $149,072 annually.

Canberra follows Sydney as the next most expensive capital city for homebuyers, where a minimum average income of $185,599 is needed.

On the flip side, Darwin offers a glimmer of hope as the most affordable capital city to buy a house in the top end, with an average price of $390,000 and a minimum required household income of $77,004.

Graham Cooke, Finder's Head of Consumer Research, expressed concern for first-time buyers who are finding it increasingly difficult to enter the housing market.

‘Many Australians dream of owning their own home, but it’s becoming increasingly difficult to get your foot in the door,’ he said.

‘Those living in major capital cities now require a substantial household income just to be able to comfortably service the average mortgage, without even considering saving for a deposit.’

The financial strain on homeowners is evident, with the Reserve Bank of Australia holding interest rates at 4.35 per cent on Tuesday, the highest level since November.

Cooke suggested that those waiting for a rate cut may be disappointed.

‘Homeowners are doing it tough and are looking for any reprieve they can get,’ he said.

‘Finder’s (research) shows households are nearing the top of their financial limit. Over a third of homeowners said they struggled to pay their mortgage in April, while for renters the number was even higher at 42 per cent.’

As discussions about the minimum household income needed to buy a home in Australia continue, a report has unveiled ‘disturbing’ figures highlighting the wealth divide among Australian households.

This data sheds light on the challenges faced by many Australians, especially seniors, in achieving financial security and homeownership.

It is important to explore how these two issues intersect and the broader implications for the nation's economic landscape.

Key Takeaways

• Owning a home on a single income is very difficult in Australia, with a minimum household income of $171,223 required to buy an average-priced house.
• In Sydney, the minimum income needed to buy an average home is $263,195, which is significantly higher than the national average.
• Finder’s analysis showed homeownership is nearly impossible for average full-time workers earning $98,218 per year according to ABS data.
• The Reserve Bank of Australia kept interest rates at 4.35 per cent, and many homeowners are looking for financial relief as they struggle with mortgage repayments.

Have you found ways to overcome these financial hurdles, or are you reconsidering your plans for homeownership? Share your stories and insights in the comments below.

 

[IAN3005]

And for that, you get a dog box.... then you lose your job and it's all over Red Rover.

 

[Bendie]

Back in the 70s through to the 90s, there were plenty of houses available (to buy, sell and rent). Plus, there were plenty of blocks of land to build on. Then Australia's population began to grow and the cycle of buy, sell, rent and build continued. Then the land started to get locked up and this killed the timber industry. Australians pay exorbitant prices for timber sourced from overseas because the Greens have locked up the timber. Governments (be it Federal, State or LGA) strangled the availability of land for housing and the infrstructure that new houses would need. So, now we're in this situation where the number of houses to rent, buy and sell are more-or-less fixed, but there are now more people (including the new immigrants) who are vying for the same target. It's like a game of musical chairs except that when the music stops no one gets chucked out of the game but the number of chairs continue to dwindle. So in a dwindling supply of houses situation, the real estate agents are in a frenzy because they can keep increasing house prices because people will pay through their noses to get into a house. I hear of people who buy a block of land for over $1M then spend another $300K+ to build. How do people survive paying such huge mortgages and still have enough for children's upkeep, food on the table, fuel for their cars and Chris Bowen's electricity nightmare?