A study conducted by the Reserve Bank of Australia has found that the average property price has risen by 15% over the last year – throwing the spotlight on the country’s slumping pay rate.
A survey conducted by the financial firm Mercer found household incomes have only moved by 1.5%.
But how much did your house price change? Well, you won’t be surprised to learn your home got a big rise. We compare how property prices are performing in Canberra, Melbourne, and Sydney against household incomes.
ACT
The average Canberran earns $1,811 per week, which equates to $94,172 per annum.
Property prices in Campbell in Canberra’s Inner North have risen by $314,500 over the last 12 months. This compares with the suburb’s median annual household income of $136,707.
Deakin, in Canberra’s Inner South, has enjoyed similar increases, with a jump of $325,000 over the last year. The suburb’s annual household income is $148,061.
Houses in O’Connor which is an affluent suburb in the Inner North have jumped by $277,500, which is much higher than the median annual household income of $122,084.
Domain Chief of Research and Economics, Dr. Nicola Powell attributed the growth to the high end of the market. She did note that houses in more affordable suburbs were also experiencing growth, but it was more modest.
Even houses in Gordon and Tuggeranong, 20 kilometres from Canberra’s CBD were experiencing growth that exceeded incomes at $25,887 per annum.
Belle Property Canberra Principal, Louise Harget told Domain that properties are spending less time on the market, so there is a sense of urgency, which is impacting property prices.
The price hikes are welcome news for those who have already found a spot on the property ladder but are causing pain for first home buyers or anyone wanting to upsize.
| Suburb | Annual change in property price | Annual household income | Change in property price minus annual household income |
| Campbell | $314,500 | $136,707 | $177,793 |
| Deakin | $325,000 | $148,061 | $176,939 |
| O’Connor | $277,500 | $122,084 | $155,416 |
| Curtin | $246,500 | $129,309 | $117,191 |
| Ainslie | $225,500 | $116,235 | $109,265 |
| Hughes | $202,500 | $130,399 | $72,101 |
| Palmerston | $184,375 | $114,974 | $69,401 |
| Farrer | $195,000 | $129,883 | $65,117 |
| Nicholls | $202,500 | $153,910 | $48,590 |
| Downer | $155,000 | $107,118 | $47,882 |
Victoria
The average salary in Melbourne is $106,895 per annum. Melbourne houses earn significantly more double than the average person each year. The median house price in Melbourne jumped by 16.2% and is now sitting at just over a million dollars.
Brighton East, 12 kilometres southeast of Melbourne’s CBD has experienced property price growth of $285,000. This outstrips the median household income for the suburb, which is $119,813.
Houses in Glen Iris, 10 kilometres southeast of the CBD have increased by $285,500, which is double the median household income of $127,356.
Property prices in Ormond, which is 12 kilometres from the CBD have increased by $241,250. The suburb’s median household income is $92,776. The difference is $148,474.
Brighton Agent Nick Johnstone spoke to Domain and said that some property prices have increased by $450,000 per year, which is significantly higher than the average salary.
He indicated that low-interest rates had influenced property prices, saying that when you can borrow $1 million for $20,000 per year, it’s a pretty good situation.
Unit prices in East Melbourne, Thornbury, and Surrey Hills had also experienced more modest growth at $18,922, $17,188, and $11,323 respectively.
| Suburb | Annual change in property price | Annual household income | Change in property price minus annual household income |
| Brighton East | $285,000 | $119,813 | $165,187 |
| Glen Iris | $285,500 | $127,356 | $158,144 |
| Ormond | $241,250 | $92,776 | $148,474 |
| Warrandyte | $277,000 | $129,387 | $147,613 |
| Brunswick East | $237,500 | $100,144 | $137,356 |
| Hampton | $262,000 | $129,155 | $132,845 |
| Pascoe Vale South | $234,000 | $106,062 | $127,938 |
| McKinnon | $242,500 | $116,970 | $125,530 |
| Canterbury | $263,500 | $141,571 | $121,929 |
| Brighton | $252,000 | $139,831 | $112,169 |
NSW
In NSW, property prices are also outpacing household income in over 50 percent of Sydney’s suburbs, with houses earning more than 10 times the average household.
The Australian Bureau of Statistics reported in May that the average personal income was $1,764.30, which translates to $91,743.60 per annum. Wage growth was modest before the COVID-19 pandemic and has slowed even further as a result.
Property prices on the other hand show no sign of slowing down.
Dover Heights, 9 kilometres east of Sydney’s CBD has experienced massive growth that far outpaces personal income. The median property price has increased by $1,265,000. This compares with an annual household income of $174,491.
Prices in nearby Bronte have increased by $1,220,000 compared with an annual household income of $153,767.
At the other end of town, houses in Northbridge, on Sydney’s Lower North Shore, have climbed by $1,050,000. The suburb’s annual household income is $192,510.
Domain’s Chief of Research and Economics Nicola Powell reiterated that the price hikes are great for people who are already in the market, but these gaps make it almost impossible for first-home buyers or upsizers. Wages are just not keeping up with property increases.
| Suburb | Annual change in median property price | Annual household income | Change in property price minus annual household income |
| Dover Heights | $1,265,000 | $174,491 | $1,090,509 |
| Bronte | $1,220,000 | $153,767 | $1,066,233 |
| Northbridge | $1,050,000 | $192,510 | $857,490 |
| Seaforth | $925,000 | $194,813 | $730,187 |
| Mosman | $875,000 | $145,189 | $729,811 |
| Bellevue Hill | $850,000 | $166,489 | $693,511 |
| Manly | $786,000 | $140,986 | $645,014 |
| Palm Beach | $762,500 | $121,528 | $640,972 |
| Gordon | $600,000 | $133,157 | $466,843 |
| Killara | $612,500 | $145,880 | $466,620 |
General outlook
If you’re a first home buyer and are struggling to save a home deposit you can access up to $30,000 from their superannuation as part of the First Home Super Saver Scheme.
The First Home Super Saver (FHSS) scheme was introduced by the Australian federal government in the 2017-18 budget to alleviate pressure on housing affordability.
The other option is to look for property further afield. Once you are on the property ladder you can then start saving to buy in an area that you want to live in. You could also consider a smaller house or a unit.
CoreLogic reported in April that although unit prices had risen by 2.3 percent across Australia, they were still much more affordable at a median price of $547,543. That compares with a median house price of $643,203.