Household income of $171K needed to afford average Aussie home, reveals Finder’s RBA survey

According to Finder’s latest RBA Cash Rate Survey™, the minimum household income required to afford the average Australian house price is $171,223, while $120,598 is needed to afford an average unit.

The survey, which gathered insights from 36 experts and economists, also revealed that 58% of panellists believe opposition to local development, or “NIMBYism”, has driven property prices higher than they would have been otherwise.

“The NIMBY attitude has pushed high-density housing further and further out of city centres, putting pressure on public transport and keeping inner-city properties at sky-high prices,” said Graham Cooke, head of consumer research at Finder.

Finder’s analysis shows that prospective homebuyers in Sydney need an average minimum household income of $263,195 to comfortably service a mortgage for a house, while in Melbourne, the required income is $169,804.

For units, Sydney remains the most expensive city, with buyers requiring a minimum household salary of $149,072, followed by Melbourne at $121,429.

“Many Australians dream of owning their own home, but it’s becoming increasingly difficult to get your foot in the door,” Cooke said. “Those living in major capital cities now require a substantial household income just to be able to comfortably service the average mortgage, without even considering saving for a deposit.”

The survey also found that the RBA has held the cash rate at 4.35% for the third consecutive month, as the cost of living pressure experienced by Australian households continues to sit in the “extreme” range.

“Homeowners are doing it tough and are looking for any reprieve they can get,” Cooke said. “Finder’s Cost of Living Pressure Gauge shows households are nearing the top of their financial limit. Over a third (36%) of homeowners said they struggled to pay their mortgage in April, while for renters, the number was even higher at 42%.”

Experts weighed in on the RBA’s decision and the state of the economy, with most agreeing that rate cuts are unlikely in the near future due to stubborn inflation and strong economic indicators.

“Right now there’s a tug of war between hoping that we’ve got through, and, with recent data, worrying that we haven’t. That puts paid to the scope for rate cuts in the next few months,” said Nicholas Gruen from Lateral Economics.