Get the Finder app 🥳

Track your credit score, free


Here’s what a house could cost in Sydney in 2050

Posted: 29 June 2016 11:21 am

Housing affordability in 2050

House prices in Australia are already unaffordable, but what will they look like by 2050?

Australia is consistently ranked among the least affordable countries in the world for housing. The problem is particularly acute in Sydney and Melbourne. Residents of these two cities devote more than a third of their income to their mortgage repayment, to the tune of 35.6% in Sydney and 30% in Melbourne, according to Moody’s.

The most recent CoreLogic Hedonic Home Value Index showed the cumulative change of capital city home values from January 2009 to May 2016 was an increase of 54.1%. Meanwhile, the mean household income increased just over 18% during the same time period.

House price growth is meant to slow in the year ahead, but income growth has also been in the doldrums, growing at its slowest pace in 18 years last year. If these trends continue, what will the future look like for housing affordability? Let’s check out the numbers.

House prices

According to the latest CoreLogic Hedonic Home Value Index, the median house price across Australia’s capital cities was $580,000. That was up 10% on last year. Sydney and Melbourne also saw some heady gains. Sydney’s median house price was $782,000, a rise of 13.1% on the previous year. Melbourne, meanwhile, saw median prices rise by 13.9% to $590,000.

It’s been an impressive run for Australian house prices overall. During the current growth cycle, capital city home values are up 36.6%.

While the property market has some dramatic peaks and troughs, over the longer term it grows at a much steadier pace. Over the past 10 years, combined capital city home values have grown by an average of 5.5% per annum. Sydney and Melbourne have seen slightly more robust growth, increasing at 6.4% per annum and 7.1% per annum, respectively. Darwin has grown slightly below the average for combined capitals, at 5.5%. Canberra, Adelaide and Brisbane have fared slightly worse at 4.0% for Canberra and 3.7% for both Brisbane and Adelaide. Perth and Hobart have seen anaemic growth, meanwhile, at 2.1% and 1.3%, respectively. If house prices follow this trend, this is how the property market could look by the year 2050.

Current median house price2050 median price at current rate of growth
Combined capitals$580,000$3,581,060

Household income

An important factor to examine when determining affordability is whether or not household income is keeping pace with property price appreciation. Figures from the Australian Bureau of Statistics tell us that the mean weekly household income as of 2013-14 was $998. Much like property prices, mean weekly household income goes through peaks and troughs. But examining trends over the past 10 years, we can see it’s grown by an average of 5.4% per annum.

If we assume this rate of growth continued from 2014 to 2016, it would put the mean weekly household income at $1,109, as seen below.

At $1,109 per week, the mean annual household income would be $57,668. That would put the median capital city house price at just over 10 times the mean annual household income. Of course, this isn’t a perfect measure as we’re comparing a median and a mean, but it paints a picture of house prices being significantly unaffordable for Australians on an average income. The picture is bleaker in Sydney and Melbourne. In Melbourne, the median house price is nearly 10.4 times the mean annual income, whereas in Sydney median prices are an alarming 13.5 times annual income. So what happens if the mean household income increases by 5.4% per annum between now and 2050?

Current mean annual incomePotential mean annual income by 2050

What could the future hold?

Of course it’s impossible to say with any certainty what the future holds for housing affordability, but if we put these pictures together it creates an alarming trend. Extrapolated out to 2050, the gap between mean household income and median house prices widens significantly in Sydney and Melbourne, as seen in the graph below.

By 2050, the median house price across Australia’s capitals has grown relatively in line with mean annual incomes, now sitting at 10.4 times the mean income. Still unaffordable, but not significantly less affordable than now.

The picture is starkly different in Sydney and Melbourne, however. Melbourne’s median house price rises from 10.4 times mean income to 17.6 times mean income. In Sydney, median prices soar even further out of reach, from 13.5 times mean income to 18.7 times mean income.

CityCurrent multiple of median house price versus mean incomePossible 2050 multiple
Combined capitals10.110.4

Meanwhile, house prices appear to become more affordable across much of the rest of the country. A house costing 8.8 times mean income in Perth today could fall to just three times mean income if trends continue. A house in Hobart currently costing 5.8 times mean income could plummet to just 1.5 times mean income by 2050.

Obviously this picture could change significantly. Any number of external factors could see house prices falter or incomes rise. House price growth could boom cities where it's traditionally lagged, while strong performers could see slumps in the future. But if the situation continues to progress as it has, it appears housing affordability in Australia could look drastically different in the future.

Compare your mortgage options now

Aussie Home Loans Logo

Enter your details and get a free consultation with an expert broker from Aussie.

By submitting this form, you agree to the Finder Privacy and Cookies Policy and Terms of Use

Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2020 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

By submitting this form, you agree to the Aussie privacy policy.

After entering your details a mortgage broker from Aussie will call you. They will discuss your situation and help you find a suitable loan.

  • A comparison of home loans from multiple lenders.
  • Expert guidance through the entire application process.
  • Free suburb and property reports.

Aussie Home Loans Lender Logos

The Adviser’s number 1 placed mortgage broker 8 years running (2013-2020)

Data indicated here is updated regularly
Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
$0 p.a.
Up to $4,000 refinance cashback.
A competitive variable rate loan from St.George. Refinancers borrowing $250,000 or more can get up $4,000 cashback for their first application (Other terms, conditions and exclusions apply).
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
$8 monthly ($96 p.a.)
Up to $3,000 refinance cashback.
A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.
UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate
$0 p.a.
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
Athena Celebrate Home Loan - 60% LVR  Owner Occupier, P&I
$0 p.a.
A very low variable rate for home buyers with 40% deposits or equity. This rate takes effect from 30 September for new and existing customers. You can get this rate if you apply today.
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR ≤ 80% (Owner Occupier, P&I)
$0 p.a.
$2,000 to $3,000 refinance cashback.
Get a competitive variable interest rate with no application fee or ongoing fees. Refinance to an eligible Suncorp loan and get a cashback of $2,000 or $3,000, depending on your loan amount. Other conditions apply. Low Rate Home Loan with Offset - LVR Under 60% (Owner Occupier, P&I)
$0 p.a.
A competitive rate with no application or ongoing fee. This loan is not available for construction.
HSBC Home Value Loan - Promotional Offer (Owner Occupier P&I)
$0 p.a.
Get a low interest rate loan with no ongoing fees. Plus you can make extra repayments and free redraw online.
Yard Variable Home Loan - LVR 80% Special (Owner Occupier, P&I)
$0 p.a.
A very low variable rate loan for home buyers with an optional offset account ($10 monthly fee). 20% deposit required.
Tic:Toc Live in 10% deposit Variable Rate - Principal & Interest
$0 p.a.
Get a very low interest rate and pay no application, settlement or valuation fees. Apply online for full approval in real time and add a 100% offset account for $10 a month.
Well Home Loans Balanced Variable - LVR 80% Special Offer (Owner occupier, P&I)
$0 p.a.
A very low interest rate for home buyers with 20% deposits saved. Add an offset account for a small fee. This special discount rate is available for new borrowers who apply and get approved by 30 November 2020. Not available for construction purposes.

Compare up to 4 providers

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

2 Responses

  1. Default Gravatar
    PhilMarch 6, 2019

    What would be the rough projected cost in 2050 of an insurance policy currently costing $450 per month?

    Also what would be projected average wage in 2050?

    • Default Gravatar
      NikkiMarch 7, 2019

      Hi Phil,

      Thanks for getting in touch! Depending on where you’re be staying, in Sydney the projected cost of a house will be 10x more expensive in 2050. We are not for sure certain how much home insurance would cost in 2050 as well as projected average wage. It will mostly depend on the Australian economy in 2050. Hope this clarifies. Don’t hesitate to message us back if you have more questions.


Go to site