Aspiring buyers looking to secure a median house in Brisbane must earn over $17,000 more in annual household income in May than they did in January just to service a typical mortgage, according to Cotality’s latest Housing Chart Pack.
The data also reveals a rapidly escalating affordability hurdle in mid-tier cities, with Perth buyers facing a similar $16,500 income requirement spike over the same five-month period.
While home values in Sydney and Melbourne declined in recent months, higher interest rates mean properties have not become more affordable. Instead, rate hikes have intensified mortgage serviceability constraints nationwide, completely offsetting the benefit of price drops in the largest capitals while continued value growth in mid-tier markets pushes entry requirements to unprecedented levels.
"Rate hikes have significantly increased the challenges of servicing a mortgage across Australia," said Cotality head of research Gerard Burg.
“In expanding markets like Brisbane and Perth, the compounding effect of rising property values and higher interest rates creates an aggressive income barrier for buyers, even at the lower end of the spectrum."
The lower end of the housing market offers little relief for budget-conscious buyers, with the minimum income required to service a lower quartile house surging by $14,500 in both Brisbane and Perth between January and May.
Driven by accelerating demand, the Brisbane unit market has witnessed dramatic shifts in recent months. There is now a difference of just over $2,000 in the minimum household income necessary to purchase a median unit in Sydney compared to Brisbane. Furthermore, intense competition for affordable housing has pushed Brisbane’s lower quartile units to officially become the most expensive entry-level apartments in the country.
"The acceleration of the Brisbane unit market highlights how compressed the affordability landscape has become," Burg said.
"Buyers are redirecting their focus toward apartments, which is rapidly erasing the traditional price gap between Brisbane and Sydney units, and making Brisbane’s entry-level apartments the most expensive nationwide."
In contrast, limited home value growth in recent years, combined with recent monthly declines, leaves Melbourne with a sizeable affordability advantage over other major capital cities. Buyers purchasing a median house in Sydney now require an additional $70,000 in annual household income compared to those buying an equivalent home in Melbourne.
