The staggering amount Sydney home buyers need to be earning to afford an average property has been revealed, as the income needed to buy a house rapidly outpaces wages.
House prices are rising so fast in the city that buyers need to be earning more than $200,000 to afford an average dwelling — up $40,000 from last year, according to new analysis.
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Freestanding houses within middle- and inner-ring suburbs call for even higher wages, Finder’s analysis of lending data and prices has revealed.
Sydney’s median house price reached $1.12 million in January, CoreLogic data reports.
According to Finder, the average freestanding home within a 30km radius of the city requires a minimum household income of $400,000 or more to pass the affordability tests necessary for a loan.
The cheapest suburb within that zone is Villawood, about 27km west of Sydney’s CBD, which was only considered affordable for home buyers who took home at least $180,000 a year.
The cheapest area for those searching for a unit was Carramar in the Parramatta area, which required a minimum salary of at least $80,000.
Finder’s analysis assumed the buyer bought at the median price and used a 20 per cent deposit on a 30-year loan on an interest rate of 6.23 per cent.
It revealed only 20 other suburbs where units were affordable for someone earning less than $100,000 a year.
The analysis painted an alarming picture — the income needed to buy a house was rising 10 times faster than wages.
House prices are on track to continue rising across the country, with property values increasing by 0.4 per cent in January, according to CoreLogic data.
This was compared to 0.3 per cent in December, and 8.7 per cent across the year.
Across the country, the median price of a home is now $842,971 in Canberra, $796,818 in Brisbane, $777,250 in Melbourne, $721,376 in Adelaide, $676,823 in Perth, $651,807 in Hobart and $501,520 in Darwin.
The national median is $759,437.