Buying a home in Sydney is becoming increasingly difficult for potential buyers relying on their income alone. With property prices skyrocketing, the traditional Australian Dream of homeownership feels more out of reach than ever.
Six-Figure Salaries Needed to Buying a home in Sydney
| Central Coast | $910,000 | $157,000 | $80,000 x2 | $182,000 |
|---|---|---|---|---|
| Sydney – Baulkham Hills and Hawkesbury | $1,861,000 | $324,000 | $149,000 x2 | $372,200 |
| Sydney – Blacktown | $1,085,750 | $185,000 | $92,000 x2 | $217,150 |
| Sydney – City and Inner South | $1,970,000 | $343,000 | $157,000 x2 | $394,000 |
| Sydney – Eastern Suburbs | $3,700,000 | $654,000 | $308,000 x2 | $740,000 |
| Sydney – Inner South West | $1,555,000 | $268,000 | $126,000 x2 | $311,000 |
| Sydney – Inner West | $2,422,500 | $425,000 | $193,000 x2 | $484,500 |
| Sydney – North Sydney and Hornsby | $2,920,000 | $514,000 | $238,000 x2 | $584,000 |
| Sydney – Northern Beaches | $2,570,000 | $451,000 | $206,000 x2 | $514,000 |
| Sydney – Outer South West | $945,000 | $163,000 | $82,000 x2 | $189,000 |
| Sydney – Outer West and Blue Mountains | $930,000 | $160,000 | $81,000 x2 | $186,000 |
| Sydney – Parramatta | $1,327,000 | $227,000 | $109,000 x2 | $265,400 |
| Sydney – Ryde | $2,390,000 | $419,000 | $190,000 x2 | $478,000 |
| Sydney – South West | $1,100,000 | $187,000 | $93,000 x2 | $220,000 |
| Sydney – Sutherland | $1,677,500 | $290,000 | $134,000 x2 | $335,500 |
New research from Canstar reveals that Sydneysiders would need to earn a six-figure salary to buy a house or unit in almost any part of the city. For example, couples looking to buy in Sydney’s eastern suburbs would each need to earn around $308,000 to afford the median house price of $3.7 million. In North Sydney and Hornsby, a couple would need salaries of $238,000 each to buy a house with a median price of $2.92 million. Even on the northern beaches, couples must earn $206,000 a year each to afford a house.
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Single Buyers Face Even Tougher Challenges
For single buyers, the situation is even more challenging. With the national average income at about $100,017, single buyers could only afford a median-priced unit in Sydney’s outer south-western or south-western regions.
Why It’s Getting Harder to Buy
Sally Tindall, Canstar’s data insights director, highlighted how home prices are pushing potential buyers further away from their dreams. She explained that without equity or property price gains from selling a previous home, most buyers can’t afford to purchase in premium suburbs, even with a 20% deposit.
Creative Solutions to Increase Buying Power
To cope with rising property prices, many buyers are looking for ways to increase their borrowing power. Some are moving to more affordable states, while others are asking for pay raises. Help from family is also common, whether it’s through a cash gift, an inheritance, or acting as a guarantor to avoid paying mortgage insurance. “Rentvesting” is another option—this involves renting in a preferred location while buying an investment property elsewhere.
Tindall’s Advice for Buyers
Tindall cautioned buyers against taking on a second job just to service a mortgage. She warned that buyers could find themselves overwhelmed after a few years of making high repayments and may not be able to afford their dream home in the long run. She advised buyers to carefully consider their long-term financial commitments and not rely on future interest rate cuts.
Renting May Become the Only Option for Some
University of Melbourne economics lecturer Dr. Lawrence Uren believes that some Australians will be completely excluded from homeownership due to the rising costs. As the rental market grows, more people may opt to purchase smaller properties like units or townhouses instead of large homes with backyards.
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Families Are Moving to Larger Homes Outside the City
Some families, like Rashida Lowe and her husband Abel Hawkins, have decided to sell their inner-city homes and move to larger properties further out. The couple sold their Leichhardt terrace in July and moved to a five-bedroom family home in Thornleigh. They found that moving outside the inner west gave them more space and better value for their money.
As Sydney’s property market continues to climb, the dream of owning a home in the city remains a challenge for many. Buyers are having to get creative and explore new ways to make their homeownership dreams a reality.
