The real growth in wealth in Australia in 2021 has been in house prices, which are now ten times higher than the average wage.
While increased price growth is good news for property owners, it’s not so rosy for first-home buyers trying to save a deposit.
REA Group PropTrack analysis of Australian Bureau of Statistics data shows average annual earnings in Australia are $69,862 while the median house price in capital cities is $771,000 – 1,104% higher than wages (although the median price in the regions is $540,000).
PropTrack economist Anne Flaherty claims it’s now nearly impossible for a single-income household on an average income to buy a home.
“For the single-person household, that ability to save a deposit has just become incredibly difficult without looking to the bank of mum and dad, for example,” Flaherty says.
The increase of the buffer rate at which mortgages are assessed (to 3% above the current mortgage rate) is also keeping some out of the market.