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How much you need to earn to buy property in Canberra

By Canfan 17 August 2015 32

Map-Salary-for-Median-Priced-House

If you want to buy the median-priced home in Canberra’s most expensive suburb for 2014, you’ll need an annual salary of $116,500.

(The suburb is Griffith, and the median house price is $1.005 million.)

New research by real estate agent comparison service Which Real Estate Agent has revealed how much you need to earn to buy in Canberra, as well as in other Australian capital cities.

Some of the findings are interesting, so we’ll share a couple of relevant local insights here.

To buy the median-priced Canberra home, you need to earn $73,000 per year. That’s almost on par with the national average – the median-priced Australian home requires an annual salary of $73,500.

As you might expect, buying in suburbs like Griffith, Yarralumla and Deakin require higher annual salaries:

  • Griffith: $116,500
  • Yarralumla: $134,200
  • Deakin: $112,000

But if you think that’s expensive, spare a thought for our neighbours up the Federal Highway. To buy the median-priced home in Sydney’s Point Piper, for example, a homebuyer needs to make at least $1.169 million per year.

In Bondi Beach? $235,000.

Darlinghurst? $162,000.

In fact, you probably need to earn more than six figures just to enter Sydney’s property market, where the median-priced home requires an annual salary of $106,000.

The good news is that isn’t the case in Canberra. The median-priced Charnwood home, for example, requires an annual salary of $54,700. In Wright, you need $69,000. This figure is a bit of a surprise, as Wright isn’t considered an affordable suburb by many (though a reader has pointed out that the low median price in Wright is likely because it doesn’t include the sale of land).

According to Which Real Estate Agent, these calculations assume that a homebuyer is single, puts down a 20 per cent deposit and has annual expenses equal to $17,907 (the definition of the poverty line). There’s some more info in the table below.

Screen Shot 2015-08-16 at 4.20.18 pm

Do these findings surprise you? 

Are Canberra property prices still too expensive?

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How much you need to earn to buy property in Canberra
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oh_ 5:30 pm 20 Aug 15

And how exactly is someone on 73K supposed to save a 120K deposit? AND live on the poverty line of $17k/yr (thats $344 a week)? even if they dont have to pay accommodation thats not much for expenses in this city…even if someone on 73k could save 12k/yr thats 10 years to save a deposit with nothing going wrong, probably not counting all the drags like HELP debt, getting yourself set up with belongings reliable car professional wardrobe etc, no weddings or babies impacting the budget etc. its just totally unfeasible unless you Are a couple (still difficult) or live a boring impoverished existance never doing anything or experiencing life just so you can buy an overpriced average house, to then start your grown up life in late 30s onward, No wonder young people are opting out.

milkman 6:41 pm 19 Aug 15

watto23 said :

dungfungus said :

And when they get rich and die who gets their wealth?
Without working for it, too!

Inheritances used to have relevance years ago when the average age was lower, but now people live longer and work longer. These days you have retired yourself before you are likely to get an inheritance and its very bad planning to count your chickens before they hatch. If your retirement plan is relying on a decent inheritance then you have issues.

+1 to this. Relying on inheritence is nuts.

milkman 6:38 pm 19 Aug 15

According to the ABS*, the ACT has the highest average weekly earnings in the country, yet according to the table in the OP has a median property price below the Australian median. Surely this means that us Canberrans have things easier than most others?

Perhaps things aren’t as bad here as we would like to think?

* http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6302.0Main%20Features6May%202015?opendocument&tabname=Summary&prodno=6302.0&issue=May%202015&num=&view=

watto23 2:50 pm 19 Aug 15

dungfungus said :

And when they get rich and die who gets their wealth?
Without working for it, too!

Inheritances used to have relevance years ago when the average age was lower, but now people live longer and work longer. These days you have retired yourself before you are likely to get an inheritance and its very bad planning to count your chickens before they hatch. If your retirement plan is relying on a decent inheritance then you have issues.

Maya123 7:01 pm 18 Aug 15

watto23 said :

Maya123 said :

I managed to buy my first house, by renting out the two spare bedrooms for several years. I would have struggled otherwise, as my income was not that high. Doing that I even managed to pay off the home loan years earlier. That was in the years before land tax, so now someone doing that might find it is not so easy, because land tax is (wrongly) not based on rental income, but land value, ie. two houses side by side; one house getting twice the rent of the other, but they both pay the same land tax.

Also rental income derived from a property you live in is looked at far less favorably than a pure investment property. In fact its probably better to rent your house out completely and rent another house to live in yourself. This is actually a real issue i think needs fixing. Surely if someone is actually living in their house and renting spare rooms, that helps ease pressure on housing and should be looked at favorably with regards to tax. If you rent your rooms out you no longer get the house CGT free for a start.

Fortunately that house was bought pre when capital gains tax would have applied. Renting out spare bedrooms used to be a good income before Land Tax, and expenses could be claimed against income. Furnishings, cleaning products, etc, could all be proportionally claimed against tax. Two out of three bedrooms were rented, so that’s two thirds of expenses.
Does anyone know if someone renting out a bedroom now has to pay full Land Tax, or a proportional portion of it? After all, not renting the whole house means the whole house is not rented, and the income might only be half or a third of what renting the whole house would be. I think there might be exceptions for family members, but what about renting to someone else? If full land tax is applied, it’s possible that might be greater than the rental income.

HiddenDragon 6:42 pm 18 Aug 15

There was a time, in the now distant past, when I thought that the Australian passion for (obsession with) real estate may, in some respects, have been a net positive for our society and economy.

Aside from all the generally acknowledged social benefits of home ownership, I surmised it probably gave us a more stable, if less dynamic economy – compared to other small, trade-exposed economies which try to rely too much on exports in a vicious economic world, where the big players are ruthless.

But I think we are now well beyond the point where the benefits are outweighed by the costs. Our economy is being badly distorted, our banks our dangerously exposed to foreign capital markets, and the proportion of household income (even with what seem to be unsustainably low interest rates) required to service a mortgage is causing a number of problems.

So when I see the umpteenth gee whiz story about a new price record being set in whatever suburb, I tend to think well, that’s all very nice – particularly if the property was being held as an investment, not as an owner/occupier, or if it’s a deceased estate (and one or more people might be in for a windfall), but beyond that, it’s just inflation, on an epic scale, with growing costs for the society and economy more generally.

watto23 4:06 pm 18 Aug 15

Maya123 said :

I managed to buy my first house, by renting out the two spare bedrooms for several years. I would have struggled otherwise, as my income was not that high. Doing that I even managed to pay off the home loan years earlier. That was in the years before land tax, so now someone doing that might find it is not so easy, because land tax is (wrongly) not based on rental income, but land value, ie. two houses side by side; one house getting twice the rent of the other, but they both pay the same land tax.

Also rental income derived from a property you live in is looked at far less favorably than a pure investment property. In fact its probably better to rent your house out completely and rent another house to live in yourself. This is actually a real issue i think needs fixing. Surely if someone is actually living in their house and renting spare rooms, that helps ease pressure on housing and should be looked at favorably with regards to tax. If you rent your rooms out you no longer get the house CGT free for a start.

dungfungus 3:43 pm 18 Aug 15

chewy14 said :

dungfungus said :

chewy14 said :

dungfungus said :

arescarti42 said :

watto23 said :

This is what happens when government policies at a local and federal level favor maintaining property prices over affordability. When I bought my place, I earnt per annum a third of the houses value. Now its closer to wage being 1/8 of the houses value.

+1

I could not afford to buy a house now, but it was easily manageable on my salary fresh out of uni 15 odd years ago. No government is going to actually make changes necessary because far too many people will lose out. Investors, superannuation funds and even home owners really don’t want to see a drop in the value of their home and property. You can’t hand out first home owner grants because it puts upward pressure on prices, so the houses are just more expensive.

It goes to show how greedy and selfish Australians are. Most are more than happy to sell out their children’s’ future, and deny them the opportunities they enjoyed if it means they can get rich without actually having to work for it.

And when they get rich and die who gets their wealth?
Without working for it, too!

Who said anything about dying rich, I thought they were all SKI’s?

But either way, I think most younger people would swap having to rely on their parents potentially maybe giving them an inheritance for a fair system any day of the week.

The media says babyboomers are evil people who accumulate wealth through rental properties thus denying the current crop of young people the “right” to buy a home at a cheap price. That is cr*p.
At a certain stage, we seniors stop spending on anything but essentials as that is all we need so there is usually something left to pass on to the offspring (or the RSPCA).
Most babyboomers struggled to get their first house and there were no “leg-ups” like conessional stamp duty of FHOGs. It was a less “fairer” system than today.
Doing it the way babyboomers did it is a life lesson about the value of money.

Dungfungus, your portrayal of older “frugal” babyboomers living off nothing to maintain an inheritance for their children is nothing but a fiction. If it was true, you wouldn’t be arguing with me because the effect on baby boomers of redressing the policy imbalance in their favour would be zero. Their lifestyles wouldn’t be affected in the slightest.

And you do realise that not everyone has wealthy parents who are going to provide them with a windfall benefit. If you support working for your money, you would be against artificial intergenerational wealth transfers to a minority, simply so they can pass that wealth on to their own offspring.

As for Leg ups?

More like hand up’s, to existing owners. Things like FHOG’s and the like did nothing except increase existing house prices propping up the market for existing owners. Nearly every government action in this space in recent decades has been to ensure that existing owners have their property prices maintained/raised. The system is geared towards increasing existing owners wealth at the expense of younger generations.

And I say all that as an owner of a house that is well above the Canberra median, any change in this space would cost me money. But it would make for a fairer system and would actually improve the overall Australian economy. The fixation on property investing in this country is detrimental to the economy.

If you really want to go all out, next time tell us how back in your day you had to walk 20 miles to school barefoot and worked in coal mines for a decade just to afford a tiny one bedroom house.

I didn’t say “living off nothing”, I said “we stop spending on things other than essentials…”
This means things like travel for pleasure (because it isn’t pleasurable any more) and new cars (the last car I purchased will still be going before I stop) etc.
There is no way I am going to go cold and hungry to ensure my kids get an inheritance.

arescarti42 2:08 pm 18 Aug 15

chewy14 said :

Dungfungus, your portrayal of older “frugal” babyboomers living off nothing to maintain an inheritance for their children is nothing but a fiction. If it was true, you wouldn’t be arguing with me because the effect on baby boomers of redressing the policy imbalance in their favour would be zero. Their lifestyles wouldn’t be affected in the slightest.

Bingo. The reality is the boomers are the biggest spendthrifts around, and as a cohort have saved next to nothing for their retirement, leaving them heavily reliant on the pension and their unearned housing wealth to maintain their extravagant lifestyles.

Future generations will end up paying for their forebears three times over, once through higher house prices, once through inherited government debt, and once through pension spending (an entitlement they will never get), and they’ll have to do this in a far worse economic climate than the boomers experienced. The boomers will be the first generation in history to leave future generations worse off than they were.

And you do realise that not everyone has wealthy parents who are going to provide them with a windfall benefit. If you support working for your money, you would be against artificial intergenerational wealth transfers to a minority, simply so they can pass that wealth on to their own offspring.

Yep, a society where wealth is inherited, not earned. That sounds like something to aspire too doesn’t it?

As for Leg ups?

More like hand up’s, to existing owners. Things like FHOG’s and the like did nothing except increase existing house prices propping up the market for existing owners. Nearly every government action in this space in recent decades has been to ensure that existing owners have their property prices maintained/raised. The system is geared towards increasing existing owners wealth at the expense of younger generations.

Exactly.

If you really want to go all out, next time tell us how back in your day you had to walk 20 miles to school barefoot and worked in coal mines for a decade just to afford a tiny one bedroom house.

https://www.youtube.com/watch?v=Xe1a1wHxTyo

Maya123 12:15 pm 18 Aug 15

chewy14 said :

dungfungus said :

chewy14 said :

dungfungus said :

arescarti42 said :

watto23 said :

This is what happens when government policies at a local and federal level favor maintaining property prices over affordability. When I bought my place, I earnt per annum a third of the houses value. Now its closer to wage being 1/8 of the houses value.

+1

I could not afford to buy a house now, but it was easily manageable on my salary fresh out of uni 15 odd years ago. No government is going to actually make changes necessary because far too many people will lose out. Investors, superannuation funds and even home owners really don’t want to see a drop in the value of their home and property. You can’t hand out first home owner grants because it puts upward pressure on prices, so the houses are just more expensive.

It goes to show how greedy and selfish Australians are. Most are more than happy to sell out their children’s’ future, and deny them the opportunities they enjoyed if it means they can get rich without actually having to work for it.

And when they get rich and die who gets their wealth?
Without working for it, too!

Who said anything about dying rich, I thought they were all SKI’s?

But either way, I think most younger people would swap having to rely on their parents potentially maybe giving them an inheritance for a fair system any day of the week.

The media says babyboomers are evil people who accumulate wealth through rental properties thus denying the current crop of young people the “right” to buy a home at a cheap price. That is cr*p.
At a certain stage, we seniors stop spending on anything but essentials as that is all we need so there is usually something left to pass on to the offspring (or the RSPCA).
Most babyboomers struggled to get their first house and there were no “leg-ups” like conessional stamp duty of FHOGs. It was a less “fairer” system than today.
Doing it the way babyboomers did it is a life lesson about the value of money.

Dungfungus, your portrayal of older “frugal” babyboomers living off nothing to maintain an inheritance for their children is nothing but a fiction. If it was true, you wouldn’t be arguing with me because the effect on baby boomers of redressing the policy imbalance in their favour would be zero. Their lifestyles wouldn’t be affected in the slightest.

And you do realise that not everyone has wealthy parents who are going to provide them with a windfall benefit. If you support working for your money, you would be against artificial intergenerational wealth transfers to a minority, simply so they can pass that wealth on to their own offspring.

As for Leg ups?

More like hand up’s, to existing owners. Things like FHOG’s and the like did nothing except increase existing house prices propping up the market for existing owners. Nearly every government action in this space in recent decades has been to ensure that existing owners have their property prices maintained/raised. The system is geared towards increasing existing owners wealth at the expense of younger generations.

And I say all that as an owner of a house that is well above the Canberra median, any change in this space would cost me money. But it would make for a fairer system and would actually improve the overall Australian economy. The fixation on property investing in this country is detrimental to the economy.

If you really want to go all out, next time tell us how back in your day you had to walk 20 miles to school barefoot and worked in coal mines for a decade just to afford a tiny one bedroom house.

“babyboomers living off nothing to maintain an inheritance for their children”

This babyboomer, like many, is still waiting to get her inheritance from still living parents. Not in a hurry, by the way. (If there is much left to inherit.) The next generation can learn patience to wait as long.

chewy14 11:52 am 18 Aug 15

dungfungus said :

chewy14 said :

dungfungus said :

arescarti42 said :

watto23 said :

This is what happens when government policies at a local and federal level favor maintaining property prices over affordability. When I bought my place, I earnt per annum a third of the houses value. Now its closer to wage being 1/8 of the houses value.

+1

I could not afford to buy a house now, but it was easily manageable on my salary fresh out of uni 15 odd years ago. No government is going to actually make changes necessary because far too many people will lose out. Investors, superannuation funds and even home owners really don’t want to see a drop in the value of their home and property. You can’t hand out first home owner grants because it puts upward pressure on prices, so the houses are just more expensive.

It goes to show how greedy and selfish Australians are. Most are more than happy to sell out their children’s’ future, and deny them the opportunities they enjoyed if it means they can get rich without actually having to work for it.

And when they get rich and die who gets their wealth?
Without working for it, too!

Who said anything about dying rich, I thought they were all SKI’s?

But either way, I think most younger people would swap having to rely on their parents potentially maybe giving them an inheritance for a fair system any day of the week.

The media says babyboomers are evil people who accumulate wealth through rental properties thus denying the current crop of young people the “right” to buy a home at a cheap price. That is cr*p.
At a certain stage, we seniors stop spending on anything but essentials as that is all we need so there is usually something left to pass on to the offspring (or the RSPCA).
Most babyboomers struggled to get their first house and there were no “leg-ups” like conessional stamp duty of FHOGs. It was a less “fairer” system than today.
Doing it the way babyboomers did it is a life lesson about the value of money.

Dungfungus, your portrayal of older “frugal” babyboomers living off nothing to maintain an inheritance for their children is nothing but a fiction. If it was true, you wouldn’t be arguing with me because the effect on baby boomers of redressing the policy imbalance in their favour would be zero. Their lifestyles wouldn’t be affected in the slightest.

And you do realise that not everyone has wealthy parents who are going to provide them with a windfall benefit. If you support working for your money, you would be against artificial intergenerational wealth transfers to a minority, simply so they can pass that wealth on to their own offspring.

As for Leg ups?

More like hand up’s, to existing owners. Things like FHOG’s and the like did nothing except increase existing house prices propping up the market for existing owners. Nearly every government action in this space in recent decades has been to ensure that existing owners have their property prices maintained/raised. The system is geared towards increasing existing owners wealth at the expense of younger generations.

And I say all that as an owner of a house that is well above the Canberra median, any change in this space would cost me money. But it would make for a fairer system and would actually improve the overall Australian economy. The fixation on property investing in this country is detrimental to the economy.

If you really want to go all out, next time tell us how back in your day you had to walk 20 miles to school barefoot and worked in coal mines for a decade just to afford a tiny one bedroom house.

VYBerlinaV8_is_back 10:54 am 18 Aug 15

arescarti42 said :

Whilst the overall rate of home ownership may not have fallen all that much, the aggregate figure masks a collapse in home ownership rates of young people, and unchanged or rising levels of older cohorts.

Quite true. But bear in mins that young people are also studying longer, marrying later, having children later, traveling young, and generally extending adolescence into their late 20’s. They also buy houses later. No doubt part of this is due to higher costs, but not all of it.

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