The Single Income Challenge: Can You Afford a Home in Australia today?

How many of us can still buy a home on one paycheck? The answer might shock you.

Could You Afford A Home In Australia in 2023 with your income?

Good day guys. It’s Leonard here from AA Finance Solutions. We know that Perth’s property value have been resilient due to overwhelming demand.

So how much do you need to make to afford a home in Australia? Join me as I explore some scenarios from data from Perth.

Back when interest rates were lower at 1.99%, you could afford a $695,000 home in Canning Vale with an income of $82,000 a year. However, as interest rates have increased, we will explore a few different scenarios with an average interest rate of 5.50% to show how much you need to make to afford a home in Australia.  

Single Income with 20% Deposit

Scenario 1, the best case scenario for a single-income earner looking to buy a house in Canning Vale with a median sale price of $695,000 and have saved up the 20% deposit required for most lenders, which means you have a loan size of $556,000. Based upon this figure and an interest rate of 5.50%, factoring in personal expenses, you must have a pre-taxable income of at least $105,000.

Single Income with 2% Deposit

Now in the second scenario, we will assume that you only have a 2% deposit to apply for the Keystart program that allows you to borrow up to 98% of the property’s value without paying LMI but a higher interest rate. Keystart has set the maximum income for a single person capped at $105,000, and based on their interest rate of 8.01% and 2% deposit, the maximum loan that can be taken out is $450,000, a huge difference compared to $556,000 in the first scenario.

Married with Dependents and 20% Deposit

How about if you are married and have two children? For the first best-case scenario, if you have a 20% deposit and a loan size of $695,000, each parent will have to earn at least $65,000 or, if a single income, $150,000.

Married with Dependents and 2% Deposit

What if you are married with two kids without a 20% deposit? If you were to do Keystart at 8.01% and a maximum allowable earning of $155,000 combined, the maximum loan that can be borrowed would be $560,000.


In all of these scenarios, the income has been based on maxed-out loans, which means that if you are looking to buy a property with a similar value, we highly recommend having a higher income, as it can become a problem when the interest rate is to rise. Not to mention, properties in the eastern states are much higher than the price of a property in Canning Vale.

As you can see, since the price of properties has gone up due to labour and material shortages while receiving incredibly high demands, it is highly improbable for a single person to purchase a property on their own based on the current market conditions unless one has a high enough income to service the loans.

However, some lenders would lend up to 95% based on your occupation and a few other ways of looking at financing your home, so speak with us today for a free consultation! I will see you guys again in the next video.

Our other articles:
How to save by refinancing from Keystart
Getting a loan will be difficult in 2023, here’s why

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