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.
Collections: Mortgage News