What you need to earn to buy a house in Melbourne: six-figure minimum in almost every suburb

13 Eyre St, Melton South - for herald sun real estate

A $442,000 sale price would fit this Melton South home comfortably into the budget of households earning at least $95,000 a year.

Melbourne families earning less than $200,000 can no longer afford a house in the majority of the city’s suburbs.

There are just two areas left where a family can buy a house without a six-figure income: Melton and Melton South.

But new figures from Finder show when it comes to buying a house, a $200,000 household income is the minimum for a median priced house in 231 of the 443 suburbs assessed.

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There were also 16 areas where buying a home requires you to earn at least $500,000 a year — or to have a deposit of more than half-a-million dollars.

Even buying Melbourne’s $860,000 median priced house requires buyers to be earning $175,000 a year, if they intend to purchase with a 20 per cent deposit and a thirty year loan at today’s 6.33 per cent typical variable interest rate.

SEE WHAT YOU NEED TO EARN TO BUY IN EVERY SUBURB

And the city’s typical $601,000 unit price is out of reach for those earning less than $122,000.

Finder personal finance specialist Taylor Blackburn said the money needed to buy a home was well above the average salary, where people maintained a 30 per cent cap on the income spent on their mortgage — a margin above which is considered to be mortgage stress.

4 Mavi Ave, Melton - for herald sun real estate

This Melton house sold for $475,000 in December, requiring an income of more than $95,000 to cover repayments for comfortably.

“If you aren’t lucky enough to have the bank of mum and dad on your side – or a significant savings to begin with – home ownership is moving more and more out of reach for many,” Mr Blackburn said.

“If prices don’t ease, we might continue to see more property concentrated in the hands of fewer people.”

Moneycat Finance chief executive Evan Davis said he was having difficult conversations with some would-be buyers as they discovered their reality and their expectations were “very poorly aligned”.

“A lot of Australians are finding it quite hard to buy without support, be it the bank of mum and dad or government programs,” Mr Davis said.

“One thing we are regularly telling clients is that they may not be able to afford to buy where they want to live, so they are being told about rentvesting. We are telling some of them to buy interstate in more affordable areas, and rent where they want to be.”

264 Clarkes Rd, Brookfield - for herald sun real estate

In Brookfield, $510,000 was enough to buy this four-bedroom house — but you’d need to be earning more than $100,000 a year to cover the mortgage.

The loan broking expert said the situation had become “greatly concerning” as significantly elevated interest rates had smashed borrowing capacity so badly even a $25,000 call in Melbourne’s typical house price had not helped.

“It really changes the family dynamic and it makes it a lot harder for one parent to work part time, even though a lot of people want to spend more time with their children — particularly while they are young,” he said.

“There is definitely a housing crisis in Melbourne and I don’t that improving any time soon.

“It’s been my experience that every single time there is a rate cut, there is more blood in the water. It drives property prices up. So people probably have to bite the bullet and buy where then can afford now.”

32 Osway St, Broadmeadows - for herald sun real estate

This three-bedroom house in Broadmeadows sold for $499,000 in December, which would require a buyer to be earning just over $100,000 a year.

Mr Davis added that the city’s $860,000 median house price was far beyond the state government’s stamp duty concession program, which he said needed to have its caps reviewed in 2025.

At present market entrants do not pay stamp duty for homes under $600,000, and pay a reduced rate for purchases up to $750,000.

Amy Lunardi Property buyer’s advocate Amy Lunardi said most young home buyers were today locked out of houses in the suburb they grew up in.

While some younger ones opt for apartments or townhouses, those with or planning to have children are taking on 20-30 minute increases in their daily commute to get a house.

“First-home buyers are accepting they can’t buy into where their parents live,” Ms Lunardi said.

“A lot of these suburbs, to buy a house in these areas they are older families selling another home or people with intergenerational wealth — someone helping with the deposit.”

13 Millewa Cres, Dallas - for herald sun real estate

Sold for $518,000 in December last year, this Dallas home would be out of reach for most families earning less than $100,000 a year.

The buyer’s advocate added that for many, buying solo was extremely difficult and there were some people earning good wages in their 30s but waiting to see if they got a partner in the hopes a second income would bolster their prospects.

While a change to stamp duty thresholds would help some buyers, Ms Lunardi said an increase in housing supply was key for addressing the affordability crisis.