Booming property prices across Australia means workers with an average income are watching their dreams of home ownership slip further and further away.
According to the latest ATO data, the average taxable income for Australians in the 2018-19 financial year was $62,549.
Meanwhile, according to this loan borrowing calculator, that would give a single person on the average income a budget of $445,000 and a couple with two average incomes $1,112,500 to buy a property.
These figures assume that they have a 20% deposit on a 30-year loan at the average variable rate.
But as Domain reports, thanks to recent property price hikes, this budget would give plenty of choice in some cities, but very little in others.
Now just to be clear…
Very few suburbs in the lists below what I would call “investment-grade” suburbs.
But remember 70% of people who buy a property are not investors, and for first homebuyers wanting to get a foot on the property ladder some of these locations make sense.
However not knowing your circumstances the lists below are really just for general interest and are by no means a recommendation.
What buyers can get on an average wage in Sydney
The answer is…Not very much.
Domain data shows that there isn’t a single Sydney suburb which has a median house price below $445,000.
However, the data does reveal that there are some options for apartment buying in Sydney’s western and southwestern suburbs such as St Marys ($415,750), Cabramatta ($395,000) and Mount Druitt ($337,000).
Even a couple on average wages would struggle to buy a house in Sydney with the city’s median now sitting at $1.3 million.
But there are a couple of options available.
Bexley ($1,102,500) and Belmore ($1.1 million), both about 13 kilometres from the CBD, are the closest that these buyers could find a suburb within their budget.
For units however, it's a different story.
Couples might be able to secure a unit in the Sydney CBD ($1,065,000), or Cammeray ($1.1 million) on the lower north shore and even Rozelle ($1.06 million) in the inner west.
What buyers can get on an average wage in Melbourne
Kurunjang ($442,250), Melton ($423,750) and Melton South ($405,000) are the only three Melbourne suburbs where a single average income earner could look to buy a house.
For units, single average-income-earning buyers can look to Coburg ($445,000), Carlton ($364,000) or go further out to somewhere like Frankston ($418,000).
Couples however could probably afford something in Brunswick and Newport ($1.095 million).
Or if a unit was more to their liking, then they would earn enough combined to put some of the more affluent suburbs on their search list - Brighton ($985,000) or Toorak ($977,000).
What buyers can get on an average wage in Brisbane
Would-be property buyers get a lot more for their money up in Brisbane.
Springfield Lakes ($442,500), Rothwell ($433,000) and Logan Reserve ($432,500) are all within reach of a single-income earner looking to buy a house.
But those after a unit can look in the inner-city suburbs of Fortitude Valley ($433,000) and Woolloongabba ($420,500). Or, looking further afield, could even secure an apartment in Marcoola ($437,500) on the Sunshine Coast and Coombabah ($445,00) on the Gold Coast, Domain data shows.
A couple earning average incomes would have a lot more choice in Brisbane than Sydney or Melbourne. But there are still almost 30 suburbs out of budget.
They have the option of the inner Brisbane suburbs of Norman Park ($1.1 million), Ashgrove ($1,090,000), Noosaville ($1.1 million) on the Sunshine Coast.
A couple after an apartment would have their pick of suburbs in south-east Queensland, including New Farm ($703,000), Main Beach ($800,000) and Noosa Heads ($1 million).
What buyers can get on an average wage in Canberra
Like Sydney, there aren’t any suburbs in Canberra available for single-average-income earners looking to buy a house.
But for units, the inner suburbs of O’Connor ($430,000) and Lyneham ($430,000) and north and north-west suburbs like Belconnen ($415,000) and Franklin ($388,500) could be within budget.
Couples wanting a house in Canberra would need to look around 15 minutes away from the city centre in suburbs like ($1.065 million) and Narrabundah ($1.055 million).
Double-income households can take their pick of Canberra’s suburbs if they're looking for a unit. Suburbs like Forrest ($736,000), Barton ($650,000) and Kingston ($590,000) are all within range.
What buyers can get on an average wage in Perth
A single average income earner in Perth could borrow enough for a two or three-bedroom house in the inner suburb of West Perth ($435,000) or a two-bedroom apartment in the beachside suburb of Scarborough ($422,500).
Houses in Kewdale ($439,500) and Cloverdale ($425,00) are also in reach, Domain data reveals.
Couples with average incomes have even more options at their fingertips.
Houses would be within budget in a range of suburbs - the inner-western suburb of Subiaco ($1.04 million), the waterfront suburb of East Fremantle ($1.075 million) and nearby Attadale ($1,082,500).
For units, there are many suburbs across the city with median prices putting them in reach - Fremantle ($475,200) Claremont ($699,000) and Victoria Park ($462,500) are just a few.
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Michael Yardney is CEO of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia’s leading experts in wealth creation through property and writes the Property Update blog.
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