Where Can I Afford to Live in Australia?
Key Takeaways:
- ABS state average earnings in Australia is $89,122.
- Most popular locations require higher than average earnings to buy property.
- Look at cheaper locations and get more for your dollar!
- Consider a smaller property if you need to live in a specific location.
Are you an Australian citizen Expat looking to return home to Australia? Or a foreign Expat wanting to make Australia your new forever home?
Extreme differences in foreign currency and property markets can mean that you are unsure whether Australia will be affordable for you. What type of property can you buy and can you move to your dream Aussie location?
Your affordability ultimately rests on your earning power and your individual situation. Here, we detail just how much you need to earn to live in Australia and whether Australia is affordable for you.
How Much Do You Need to Earn to Buy a House in Australia?
You need to earn in excess of $76,265 per year to purchase an Australian property with a median price tag comfortably. Those earnings will allow you to buy a median home in Perth if you have a 20% deposit of $110,020.
Striking an average of $550,099, Perth properties are just about in reaching distance for the average Aussie or Expat. The average gross income per year in Perth is $95,706, allowing below-average earners to consider a home loan.
Typically, a mortgage using these figures will cost you around $1,906 each month.
The most expensive place to live in Australia is Sydney, with a median property value surging to $1,224,613. To purchase a property of this value, earnings must reach $169,737 annually, significantly above the $91,099 average Sydneysider’s wages.
You must also have a 20% deposit of $244,923. How much would the home loan repayments cost you per month to buy a median Sydney property? You will need to pay around $4,242 per month.
Get a free Australian mortgage assessment today.
How much do you need to earn to purchase a median property in your favourite Aussie location? Here are the latest figures for you to consider before making your property search.
Location | Property Median Value | Yearly Earnings |
Sydney | $1,224,613 | $169,737 |
Melbourne | $929,769 | $128,883 |
Canberra | $877,311 | $121,601 |
Brisbane | $657,551 | $91,150 |
Hobart | $652,092 | $90,390 |
Darwin | $567,842 | $78,706 |
Adelaide | $567,842 | $78,706 |
Perth | $550,099 | $76,265 |
Do I Need to Earn More Than Average to Afford a House in Australia?
Many popular locations across the country will require above-average gross income to buy a median-priced home. The exceptions are Darwin, Perth, and Adelaide where you can still purchase a property within the average earnings threshold.
Unfortunately, house prices have skyrocketed yet wages have remained almost unchanged. ABS statistics place the average earnings in Australia to have risen by 2.4% since November 2020. However, property prices across Australia have risen by 24%!
Such diverse differences in earnings and the property market are making some areas across the nation unaffordable for the average person.
Where Is the Cheapest Place to Live in Australia?
Darwin, Adelaide, and Perth offer you great value for your Aussie dollar if you are looking for capital city living. However, you may find a bigger bargain the further you move away from bustling capital cities.
Coober Pedy
The median property price in Coober Pedy is just $70,000, offering authentic outback living. Located in Southern Australia, Coober Pedy can offer first home buyers an easier way to break into the property market.
Famous for its opal mining, Coober Pedy is not as isolated as it used to be and can provide a low-cost mode of living.
Tara
Would you prefer to live in the heart of Queensland? Homes in Tara can be bought at a median price of $110,000. Positioned 306km from Brisbane, Tara provides first home buyers with a quiet, rural abode away from the noise and mayhem of the city.
Coonamble
Finding an affordable home in New South Wales is not an easy task! However, Coonamble enjoys a median house price of $122,500, ensuring a community lifestyle, is great for raising a family.
Located 575km from the centre of Sydney, reach the centre of the busy city after several hours travelling.
Manunda
Experiencing median home prices of $145,000, Manunda is a great option if you want to be close to a bustlin community. Only a 10 minute drive from the Cairns Esplande, Manunda could provide you with an affordable property buying option that is not too isolated.
Get a free Australian mortgage assessment today.
How Much Can I Borrow?
Your borrowing power will depend on varying factors such as your income, your standing debts, and your credit provider.
Your borrowing capacity will also depend on the interest rates and home loans available to you. You can find a precise figure using Odin Mortgage’s borrowing power calculator!
Your Income and Assets
The more you earn, the more you may be able to borrow! Your earnings before tax are the basis of your borrowing power calculation, in addition to any foreign income.
You should also declare any savings you have as well as any assets, such as another property.
Your Outgoings
You will need to calculate accurate living expenses calculations when applying for a home loan. This helps the lender assess whether mortgage repayments will be affordable for you.
Your current debts will also be taken into consideration, such as any other loans and credit cards. You can improve your borrowing power by canceling any credit cards and clearing as much debt as possible.
It is important to remember that even a credit card that you owe zero money will affect your borrowing power. So, what if you have a $6,000 credit card limit that you owe no money on? That $6,000 limit still affects your borrowing power!
How many dependants you have also affects your borrowing power, with every child judged as an expense! It may make better financial sense to secure a home loan before starting a family, heightening your borrowing power. Secure a home loan with Odin Mortgage today!
Your Deposit
It is recommended that you have a 20% deposit to pay towards a home purchase. A sizeable deposit will make more lenders consider your application, and prevent Lenders’ Mortgage Insurance from being required.
LMI is an additional expense to your monthly expenditure, securing the interests of your lender in case you default repayments. Zero money paid reduces the amount of home loan borrowed and is simply an insurance cost.
Your Credit Score
Your credit score will impact the amount you can borrow significantly. A low credit score will signal to a lender that you are irresponsible with money and that you have defaulted previously with debt repayments.
A good credit score highlights to lenders that you are financially responsible and that you have paid debt repayments previously.
Typically, a credit score of around 650 is considered good, although this varies slightly according to which credit reference agency is used. However, it will impact the loan approved.
How Much Can I Afford to Pay Each Month?
How much you can afford depends on your income and your expenditure as well as the loan approval interest rate. Before agreeing to a home loan, you must make sure that the monthly repayments are affordable for you.
It is recommended in the industry that you spend no more than 30% of your pre-tax earnings on mortgage repayments.
Of course, you can spend more of your monthly income on mortgage repayments if you wish, as long as your lender agrees. But your monthly repayments must be comfortable for you to pay over the long term.
Here are the approximate monthly repayments for median house prices in Australia when a 20% deposit is paid.
Location | Property Median Value | Monthly Repayment |
Sydney | $1,224,613 | $4,242 |
Melbourne | $929,769 | $3,221 |
Canberra | $877,311 | $3,039 |
Brisbane | $657,551 | $2,278 |
Hobart | $652,092 | $2,259 |
Darwin | $567,842 | $1,967 |
Adelaide | $567,842 | $1,911 |
Perth | $550,099 | $1,906 |
However, with the exception of Perth, Adelaide, and Darwin, over 30% of your monthly income will be spent on mortgage repayments. This emphasises the growing gap between affordable housing in Australia.
For example, the ABS states the average monthly income in Melbourne is $7,447. Using the ideal 30% rule would mean mortgage repayments of $2234.
However, the average Melbourne home loan repayment is $3,221 per month. This would mean you need to pay 43.5% of your average income in Melbourne to pay your home loan repayments.
Discover how much your monthly repayments will be with accurate and precise calculations from your leading mortgage brokers! Use Odin Mortgage’s mortgage repayment calculator today!
Get a free Australian mortgage assessment today.
What House Can I Afford Australia?
Your affordability depends entirely on your circumstances. The median Australian property is a three-bedroomed home, usually measuring around 236 square meters.
If you are finding a median Aussie property unaffordable, there are other steps you can take to discover a cheaper option.
Smaller Property
If you want to buy a home in your perfect location, looking for a smaller property could be an affordable solution. Whilst a median 3 bedroom property in Melbourne surpasses $900,000, a 2 bed can hit the $500,000 mark.
You could save a sizeable chunk of money opting for a 2 bedroom property whilst remaining in your favored location.
Apartments
Buying an apartment in Melbourne can be cheaper, although there are some very expensive units for sale in exclusive areas.
The average apartment currently costs $470,000 in Melbourne. However, you could buy a cheaper unit if you are looking for a 1 bedroom or studio apartment.
Location
Moving to a cheaper location will always save you money. Purchasing a home in a rural or semi-rural location in Australia will mean you get more property and land for your money.
However, if you need to live in a specific location to be closer to work or family, you may have less room to maneuver.
Look at locations on the outskirts of your desired location, assessing whether the commuting time is doable for you. You could save a good portion of money just by moving 30 minutes away from a more expensive area.
Contact Odin Mortgage Today
Odin Mortgage experts are mortgage broker specialists for Expats looking to buy a home or refinance a current property. Contact Odin Mortgage today and request a callback! Start your real estate adventure in Australia today and ask for the best Australian Expat home loans!
Frequently Asked Questions
Which city is the best Australian location for Expat opportunities?
Sydney is most Expat’s choice of location when living in Australia. Offering a vast range of employment opportunities, Sydneysiders can also adopt a great lifestyle close to exquisite beaches.
However, this amazing city also comes with a high price tag and so may only be affordable for higher-earning Expats. See how much you can borrow using Odin Mortgage’s borrowing power calculator, today!
Is it better to rent or buy in Australia as an Expat?
Financially, it is better to buy a property as you are investing in a tangible asset. Renting costs are still high and you have nothing left to show for the money you have paid. Your landlord gains the rental income and you are left with nothing!
However, when you first arrive in Australia, renting could be a great choice whilst you get a feel for a location. If you find your first location too busy or too quiet, you can easily move states when renting.
How can I buy a home in Australia when I don’t live there yet?
Odin Mortgage can help put everything in place for you to find the best deal to buy your Aussie dream home!
We are Australian Credit Licence brokers and experts in Australian Expat mortgages. We are waiting for your inquiry!
Read our FAQs to find out about our broker experts and how we can help you! Contact Odin Mortgage today for a free, no-obligation discussion!
Get a free Australian mortgage assessment today.
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