According to a new report from the comparison website RateCity, if you’re single, earn an average income, and are in the market to buy a home, your dream is likely unattainable in six of Australia’s capital cities.
RateCity measured official house price data and mortgage costs in Australia’s capital cities. According to their findings, only Hobart and Adelaide allow an average income earner to buy a median-priced home without third-party assistance.
The most overpriced capital city is Sydney, where a homebuyer would need to earn well in excess of six figures to comfortably make repayments.
RateCity’s analysis considered the salary required to afford repayments on a 30-year loan without experiencing housing stress. (To avoid housing stress, individuals should not spend more than a third of their income on housing costs.)
In Sydney, home buyers need an annual income of $137,556 to make stress-free repayments. The annual income is $96,706 in Melbourne and $80,866 in Brisbane.
Single people have it much harder than couples, as they’ll have to pay council rates and strata levies without the assistance of a partner. Lenders also prefer double applicants on housing loans. “With the tighter lending standards, the lenders definitely prefer double applicants for owner-occupied housing loans – as it reduces their risk [when] lending money and it also has the impact of increasing the borrowing power,” said Taj Singh, co-founder of First Home Buyers Australia (FHBA).
With more and more young Australians postponing marriage to finish tertiary education and launch careers, many are delaying their home ownership as a result. Singles who want to buy their first home without the aid of a partner would have to consider other avenues, like co-investing with a friend or family member, or asking parents for financial assistance.
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