Australians now need to earn over $300000 per year to comfortably afford to buy their own home, according to new housing data.
Suburbtrends analysed over 22,000 property sales throughout October this year and found that median house prices were nine times the average annual income.
The report used the internationally recognised “median multiple” to rate affordability – which is where a market’s median house price is divided by the gross median household income.
A median multiple of 3.0 is largely considered on a global scale to be deemed “affordable”.
It found Australia had a median multiple of 9.1, suggesting Australians would need to earn $301,769 to be able to afford their own home.
According to the research, the median income required to buy a home on Sydney’s Northern Beaches was $600000 per year while the city’s outer west and Blue Mountains region was $283333.
In Melbourne, the median income stood at $428833 per year in the city’s inner-east, $243333 per year for Geelong, and $274000 per year on the Mornington Peninsula.
Affordability eased slightly in Brisbane with a median income of $330000 per year needed to buy in the city’s south and $282500 per year on the Gold Coast.
Lardner urged effective policy solutions were needed to avoid exacerbating the affordability crisis and widening the inequality gap.
He warned strategies such as First Home Buyer grants and Shared Equity schemes only amplified the problem by driving up house prices in the long term.
“You might get a sugar hit by helping more people into houses, but once you stop that policy or if you constrain or limit how many people are able to access that, it will make it worse for the rest,” he said.
“Anything that is a grant for a buyer, ultimately just becomes an inflationary impact that helps the seller more than the buyer.”
Lardner said the government must come up with a housing policy that balances supply and affordability.
“The government is focusing on supply, which is great, but we need to just insert one extra point which is affordable supply,” he said.
“Building houses or apartments that are $700000 plus doesn’t work, we need to be doing everything we can to build under $500000.”
(9 NEWS)
