Can the average Joe afford the average home?

By Ken Macleod
Monday, 29 June 2015

Treasurer Joe Hockey’s suggestion that people should “get a good job that pays good money” in order to buy their first home, sparked a debate about housing affordability. In many capital cities the growth in house prices in some areas has far outstripped the growth in average incomes.

So, how would the average young person fare in the real estate market across Australia?

This interactive explores housing affordability per Local Government Area (LGA), based on the average income for two age groups: 25-34 years old, and 35-44.

Based on a young person’s address and their average income can a single person, or a couple, purchase the median priced house or unit in their LGA?

Explore this interactive:

  • Choose a postcode
  • Are you a single person or a couple looking to purchase?
  • Are you looking to purchase a unit or a house?
  • Which age bracket are you in? 25-34 or 35-44

To navigate between regions enter your postcode, use the quick links for capital cities, or drag the map to navigate between the Local Government Areas.

Is buying property realistic for the average young Australian?

Albury

NOTES: Local Government Area (LGA) home and unit estimates are based on the median value for the year to March 2015. Data on home and unit estimates is supplied by CoreLogic RP Data research analyst Tim Lawless. Where there were less than 10 sales in total, data was excluded.
The average income estimates are from the Australian Bureau of Statistics Wage and Salary Earner Statistics for Small Areas. Income estimates have been adjusted for March 2015 using the Australian Bureau of Statistics Wage Price Index. A ‘couples’ average income is calculated as a 'single' income doubled.
*The salary required to purchase a house or unit is an inferred value based on the buyer having a 20% deposit and money for all other entry costs (stamp duty, legal etc). It presumes a lender will provide a mortgage to the borrower (based on current lending rates) of 3.5 times their gross salary, but does not factor in changing interest rates. The 3.5 figure is based on the RAMS home loan website “As a rough guide, when taking out a home loan in Australia you can generally borrow between three and four times your total gross income, although it will vary on a case by case basis.”
Please note, this is not a mortgage calculator and for the sake of brevity and consistency the formulae used to calculate the inferred minimum salary required to purchase a home is simplified. What a financial institution is willing to lend is dependent on many factors, not limited to, income, credit history, deposit amount, monthly expenses, other loans, dependents etc. This interactive is not intended to be used to assess eligibility for a loan and anyone seeking to buy property should seek advice from a relevant qualified professional.