How much income is needed to buy a home in Australia?

Australian housing affordability has tightened to the point where a median-income household now needs almost half its income for repayments on a new mortgage. In 2025, that household needed to put 45.9% of its income toward repayments, while saving a 20% deposit took 11.2 years. In 2024–25, only 15% of home sales were affordable for a median-income household.

How much income is needed to buy a home in Australia by property price?

Property price has the biggest effect on the income needed to buy a home, because a higher purchase price increases both the loan size and the assessed repayment.

At the national mean dwelling price of $1,111,100 in March 2026, a single borrower would need an estimated minimum gross income of about $243,500 a year under this model, based on a 20% deposit. That is 2.5 times the national median full-time earnings of $98,124 and 2.3 times the mean full-time earnings of $106,657.

Even at a property price of $500,000, the estimated qualifying income is $109,600, which is above the national median full-time salary.

The figures are calculated scenarios using official inputs, including the RBA new owner-occupier P&I rate of 5.92% in April 2026, APRA’s 3 percentage point serviceability buffer, a 30-year loan term and a 20% deposit. The serviceability buffer gives an assessment rate of 8.92% for owner-occupier loans.

Minimum income is calculated as the gross annual salary at which assessed repayments equal 35% of gross income. These figures are modelled estimates, not official income thresholds or lender approval amounts.

These figures are modelled income estimates, not a guarantee of loan approval. Lenders also assess living expenses, existing debt, credit history, income stability and other borrower circumstances. A borrower with large credit card limits or personal loan debt may have lower borrowing capacity than the modelled figure suggests.

How much income is needed to buy a home in Australian capital cities?

Sydney’s median established house transfer price was $1,485,000 in the March quarter of 2026. This was 75% higher than Melbourne’s median of $850,000 and more than double Hobart’s median of $740,000.

Under this model, that price difference creates a wide gap in estimated income requirements. A single borrower would need an estimated minimum annual income of about $325,400 to service a median established house purchase in Sydney, compared with $162,100 in Hobart and $164,300 in Darwin.

At the state level, the gap between mean dwelling prices and full-time earnings is widest in New South Wales. Under this model, the minimum income needed to service the state’s mean dwelling price is $290,300, equal to 2.7 times the New South Wales full-time ordinary-time earnings figure of $108,368.

The Northern Territory has the narrowest gap, with a modelled minimum income of $130,900 compared with full-time ordinary-time earnings of $100,999.

The state-level figures use mean dwelling prices and cover all dwelling types, including houses, units and townhouses. This differs from the capital-city comparison above, which uses median established house transfer prices.

Can a single-income buyer afford a home in Australia?

A single borrower on the national median full-time income of $98,124 a year has modelled borrowing capacity of about $358,000, giving estimated purchasing power of about $448,000 with a 20% deposit. That is below the median established house transfer price in every capital city.

Two borrowers each earning the national median full-time income have combined modelled borrowing capacity of about $716,000, giving estimated purchasing power of about $896,000 with a 20% deposit. That is enough to reach Melbourne’s median established house transfer price, but remains below the median in Brisbane, Adelaide, Perth, Canberra and Sydney.

The increase in assessed mortgage rates has reduced modelled borrowing capacity for single-income buyers. When the RBA’s new owner-occupier rate was 2.42% in December 2021, the same single median income would have supported modelled borrowing capacity of about $509,000, giving estimated purchasing power of approximately $636,000 with a 20% deposit. That was enough to reach the median established house transfer prices in Darwin and Hobart, but still below Melbourne’s median. At the April 2026 assessment rate of 8.92%, the same income supports modelled borrowing capacity of about $358,000.

How does deposit size change the income needed to buy a home?

At median household income, it now takes 11.2 years to save a 20% deposit, up from 10.6 years a year earlier. A smaller deposit increases the loan size, which also increases the income needed to meet the modelled repayment test.

On a $1,000,000 property, moving from a 5% deposit to a 20% deposit reduces the modelled minimum income requirement by about $41,000 a year. However, the larger deposit also requires an additional $150,000 upfront.

For deposits below 20%, Lenders Mortgage Insurance may also apply, depending on the lender, loan type and borrower circumstances.

How interest rates and dwelling prices changed income requirements

Between December 2011 and December 2025, the national mean dwelling price rose from $486,900 to $1,088,800, an increase of 123.6%. Full-time adult ordinary-time earnings rose from $69,165 to $106,657 a year over the same period, an increase of 54.2%. This means national mean dwelling prices grew at about 2.3 times the pace of full-time earnings over those 14 years.

The increase in mortgage rates added a second layer to the affordability gap. New owner-occupier P&I rates rose from 2.42% in December 2021 to 6.18% in December 2023, before easing to 5.42% by December 2025. After cash rate increases before April 2026, the RBA’s new owner-occupier P&I rate rose to 5.92% in April 2026.

Source: RBA Statistical Table F6, Lenders’ Interest Rates. New owner-occupier P&I loan rates. Selected months only.

What do lenders assess beyond income?

For the national average owner-occupier loan of $735,000, APRA’s 3-percentage-point serviceability buffer increases the modelled assessed monthly repayment from $4,369 to $5,872, a difference of $1,503 per month. Income is only one part of mortgage serviceability. Lenders also assess living expenses, existing debt, credit history, income stability and other borrower circumstances. These factors can reduce borrowing capacity below what the income figure alone suggests.

Source: APRA Prudential Practice Guide APG 223, Residential Mortgage Lending; APRA macroprudential settings update, May 2026.

The result is that two borrowers on identical salaries may have different borrowing capacity outcomes. A borrower with $50,000 in credit card limits and a car loan may have lower borrowing capacity than one with no existing debts and a stable base salary, even if their gross income is the same.

How much borrowing power do different salaries provide in Australia?

Even the highest state or territory full-time earnings figure, the ACT at $116,917 a year, gives a single borrower modelled purchasing power of about $534,000. That is below the median established house transfer price in every capital city.

A borrower on the national median full-time income of $98,124 has modelled purchasing power of about $448,000, while two borrowers each earning the national median full-time income have combined modelled purchasing power of about $896,000.

The four profiles below show how salary translates into modelled borrowing capacity under the article’s assumptions, including an 8.92% assessment rate, a 30-year loan term, a 20% deposit and a 35% debt-service ratio.

How much has modelled borrowing power changed since 2021?

At the December 2021 rate low of 2.42%, APRA’s 3 percentage point buffer gave an assessment rate of 5.42%. Under this model, a borrower on the national median full-time income had estimated borrowing capacity of about $509,000, giving modelled purchasing power of about $636,000 with a 20% deposit.

At the April 2026 assessment rate of 8.92%, the same income supports estimated borrowing capacity of about $358,000, with modelled purchasing power of about $448,000. That is a reduction of around $188,000 in modelled purchasing power from the same salary over four and a half years.

The table shows how modelled borrowing capacity changed as assessment rates moved over time. The maximum loan amount falls when the assessment rate rises, because serviceability is tested against the assessed repayment rather than the actual repayment. Even when actual rates eased in 2025, the assessment rate remained higher than in 2021, keeping modelled borrowing capacity below the earlier level.

The repayment comparison shows how higher rates changed borrowing capacity. In December 2021, a borrower at the maximum modelled loan capacity had an actual monthly repayment of $1,988. By April 2026, the same income supported a smaller maximum loan, but the actual monthly repayment was higher at $2,129.

Under this model, the April 2026 borrower has lower buying power but a higher monthly repayment. This reflects the effect of higher mortgage rates, which reduce modelled borrowing capacity while increasing repayments on the amount borrowed.

For a borrower on the mean full-time income of $106,657, the modelled buying power decline since 2021 is around $204,000, from approximately $691,000 to $487,000.