A $152,000 salary - what an upstart Sydney median first home buyer needs
A first-home buyer - on their own - technically needs to earn about $152,000 a year to afford the median $752,000 Sydney dwelling.
It would take $115,000 in Melbourne and $111,000 in Canberra.
A single first-home buyer would need to earn $103,000 in Perth, $93,000 in Brisbane and $81,000 in Adelaide.
Affordability was better for couples buying a house together, The Australian Financial Review, using methodology from the University of NSW, added.
The salary required to make mortgage payment was based on the median dwelling price of each capital city in May from CoreLogic RP Data.
It assumed first-home buyers would put down 10 per cent as a deposit, and yardstick 30 per cent of their before-tax salary would go towards mortgage payment over 30 years, at a current standard variable rate of 5.38 per cent.
The common definition of "mortgage stress" among housing experts is spending more than 30 per cent of a salary on home loan repayments.
Ofcourse most first time buyers have historically directed more than 30% towards their mortgage as they stretch a little to get onto the ladder, and also most were never typically expected to actually start with a purchase at the Sydney median price.
Retailer Gerry Harvey has been recalling the time when a newlywed couple achieved local fame when they bought a home straight after marrying!
Sydney prices are actually more affordable than in the booms of 1989 or 2004.
Indeed in 2004, the figure was 41 per cent, according to analysts BIS Shrapnel.
Even before the more recent global financial crisis, when mortgage interest rates headed towards 10 per cent, the requirement was 39 per cent.