Australians may need an annual income of $113,000–$336,000 to buy a house in a major city, or $76,000–$163,000 for a unit, based on Domain’s June 2025 House Price Report. For reference, ABS data shows that in May 2025, average full-time adult ordinary-time weekly earnings (seasonally adjusted) were about $2,010—roughly $104,520 a year.
With the national average home price surpassing $1 million in March 2025, and over 30% of houses at or above that level, knowing the target income is important, especially for first-home buyers.
Current Property Market Reality in Australia
Australia’s property market is testing affordability limits. By March 2025, the average home cost $1,002,500, according to the ABS.
So, how far have we gone?
The Guardian reported that in December 2023, house prices were 16.4 times the average annual income per person, compared to about 9.5 times in the 1990s and early 2000s. Buying today is far tougher.
Income Requirements by Australian Cities
The estimates shown here are based on June 2025 average dwelling prices from Domain, a 5.68% average interest rate, an 80% loan (20% deposit), and a 30-year loan term, with repayments capped at 30% of household income.
Repayments are capped at 30% of household income, a common benchmark used to prevent mortgage stress, where housing costs consume too much of a household’s budget.
Sydney: The Most Expensive Market
Sydney consistently requires the highest income to buy a house in Australia. Following June 2025 house prices, households may need an income of at least $319,000 a year to afford an average house, based on the median house price of $1.72 million. For units, buyers need approximately $155,000 annually.
However, location within Sydney makes a substantial difference. Premium suburbs demand extraordinary incomes, such as in Point Piper.
Melbourne: Second Most Expensive
Melbourne offers slightly better affordability than Sydney. Melbourne residents need to earn around $197,000 each year to comfortably afford a mortgage for the average house. The median house price of approximately $1.06 million makes Melbourne more accessible than Sydney, though still challenging for many Australians.
Brisbane: Growing Unaffordability
Brisbane’s property market has experienced significant growth, with median house values jumping from $577,664 in Dec 2019 2020 to $1.06 million in Jun 2025. Brisbane residents need a minimum income of $196,000 to avoid mortgage stress when purchasing a home.
Perth: More Affordable Options
Perth offers greater affordability among major capitals. Homebuyers need an annual salary of $177,000 to buy the median-priced home with a median house price of $954,686. This makes Perth one of the most accessible major city markets for first home buyers.
Adelaide: Approaching Unaffordability
Adelaide’s market has tightened considerably, with property values hurtling towards the $1.01 million mark, with the average Adelaide house. Buyers require approximately $187,000 annually to avoid mortgage stress.
Darwin: Most Affordable Capital
Darwin remains the most affordable capital city. Residents may need to earn $107,000 to stay below the 30 per cent mortgage stress limit, making it the most accessible option for first home buyers seeking capital city living.
Canberra: High Income Requirements
Despite being smaller than other capitals, Canberra requires substantial income. Canberra residents need $198,000 annually to comfortably afford a mortgage for the average house ($1.07 million).
Understanding Mortgage Stress and Affordability
Financial experts typically define mortgage stress as spending more than 30% of pre-tax income on mortgage repayments. In 2025, Finder’s Consumer Sentiment Tracker shows average monthly home loan repayments exceed $2,660, up from about $1,479 in April 2022.
The rapid increase in home loans has created significant pressure on Australian households. In fact, over half of 7,600+ Yahoo Finance poll respondents said their mortgage takes up more than 40% of their income.
First Home Buyers: Navigating the Challenge
Buying a first home has become especially tough in today’s housing market. The measure of years to save a 20% deposit for the median regional home on a median regional income has risen to 10.6 years, according to the ANZ CoreLogic Housing Affordability Report 2024.
However, various government assistance programs can help reduce these barriers:
First Home Buyers Grant Programs
The First Home Owner Grant provides substantial assistance across Australia:
- Queensland: Up to $30,000 for new homes under $750,000
- South Australia: Grants up to $15,000 for building a new home
- New South Wales, Victoria, Western Australia, Northern Territory: $10,000 for eligible new homes
Home Guarantee Scheme
The Home Guarantee Scheme helps buyers with a small deposit secure a home loan with just 2% or 5% down (depending on the Guarantee), without paying Lenders Mortgage Insurance.
This scheme has three components:
- First Home Guarantee: 5% deposit minimum
- Regional First Home Buyer Guarantee: Buy with just 5% deposit
- Family Home Guarantee: 2% deposit minimum
Stamp Duty Concessions
Most states offer transfer duty relief for first home buyers:
- New South Wales: Full exemption for homes at or under $800,000
- Queensland: Exemption for homes valued at less than $800,000
- Victoria: Stamp duty reduction based on property value
- Western Australia: No stamp duty for homes under $450,000
Regional vs Capital City Opportunities
While capital cities dominate headlines, regional areas often provide more affordable entry points. However, the rapid rise in prices during the COVID lockdowns has reduced the affordability gap that once set regional markets apart from metropolitan areas.
Regional centres like Bendigo, Ballarat, Cairns, and Townsville offer alternatives for buyers priced out of major capitals, though income requirements vary significantly by location.
Strategies for Achieving Homeownership
Building a Larger Deposit
While government schemes allow smaller deposits, saving a larger deposit reduces borrowing costs and improves loan affordability. Consider:
- Utilising the First Home Super Saver Scheme to save through superannuation
- Exploring shared equity schemes where available
- Considering purchasing with family members or friends
Maximising Government Assistance
Successful buyers often combine multiple programs:
- First Home Owner Grant for upfront funds
- Home Guarantee Scheme to reduce deposit requirements
- Transfer duty concessions to lower transaction costs
Alternative Property Types
A growing number of buyers are adjusting their goals to align with current market conditions. Some buyers are buying units rather than houses, while others explore emerging suburbs or consider townhouses as stepping stones to detached homes.
The Outlook for 2025 and Beyond
Property values shift in response to multiple influences, and at different points in the cycle, these factors combine to push prices either upward or downward. Current indicators suggest continued growth, driven by:
- Strong population growth and immigration
- Ongoing housing supply shortages
- Potential interest rate reductions
- Increased investor activity
For prospective buyers, this environment demands careful planning and professional guidance to navigate successfully.
Conclusion
The income required to buy a house in Australia varies dramatically by location, from approximately $88,000 in more affordable markets to nearly $300,000 in premium areas. While these figures may seem daunting, strategic use of government assistance programs, careful financial planning, and professional guidance can help make homeownership achievable for many Australians.
At Unlocked Finance, we understand the complexities of today’s property market and the unique challenges facing first home buyers and upgraders alike. Our experienced Toowoomba Mortgage Brokers specialise in helping you navigate the home loans landscape, maximise available government assistance, and structure financing solutions that fit individual circumstances.
Whether you’re a first-home buyer exploring your options or an experienced buyer looking to upgrade, contact us for a personalised consultation that puts your homeownership goals within reach.
