The average mortgage now costs eight times your annual salary

Andrew Munro 30 May 2017

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Australia's average house price is now $656,800.

Australian homebuyers are having to dig deep as the average price ($656,800) is now a whopping eight times the average annual after tax salary ($64,338), according to a recent finder study.

Since December 2014, average house prices have risen from $571,700 (Dec 2014) to $656,800 (Dec 2016), a rise of almost 15% (14.9%). This is a stark contrast to 20 years ago where the average home cost $112,700, a mere three times the average salary.

In 2016, putting down a 20% deposit on a $656,800 home would cost $131,360, meaning home valued at $656,800 with 20% loan-to-value-ratio (LVR) would be $525,440.

According to the research from finder, you would need a minimum pre-tax income of $116,440 to service the loan, leaving many potential Australian homebuyers asking themselves if they'll ever be able to buy a property.

Unaffordable mortgages

There is a real danger of Australians falling behind on their mortgage, with Aussies spending around 30% of their pre-tax income on loan repayments.

The study found, perhaps unsurprisingly, that NSW was the least affordable state in Australia. The average mortgage with 20 (LVR) was 10.8 times the average salary.

StateHome pricesAverage net wage per stateMultiple (at 20% LVR)
NSW$864,900$64,15810.8x
VIC$690,100$63,1528.7x
QLD$492,200$62,5106.3x
SA$435,400$61,3035.7x
WA$536,600$70,0376.1x
TAS$343,900$57,5234.8x
NT$461,000$69,8175.3x
ACT$642,900$69,4897.4x

These figures were even worse when split between sexes, with the average mortgage being 12 times the average woman's wage.

StateHome pricesAverage net wage men Average net wage womenMultiple for men (at 20% LVR)Multiple for women (at 20% LVR)
NSW$864,900$68,092$57,62110.2x12.0x
VIC$690,100$66,651$56,8988.3x9.7x
QLD$492,200$66,572$55,3685.9x7.1x
SA$435,400$64,049$56,2035.4x6.2x
WA$536,600$76,198$58,7345.6x7.3x
TAS$343,900$60,184$52,4734.6x5.2x
NT$461,000$77,368$59,2894.8x6.2x
ACT$642,900$73,051$65,7507.0x7.8x

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Picture: Shutterstock

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