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Accounting for more than 2 million people, workers in the most common Australian jobs cannot afford the median home price, according to new analysis.
The Parliamentary Library has used ATO income data, RBA lending reports and CoreLogic’s house price index to report, at the behest of the Greens, on the affordability of housing for Australia’s most common occupations.
These occupations include primary school teacher, nurse, accountant, childcare worker, aged care worker, sales assistant, retail manager, general clerical worker, truck driver and receptionist.
According to the analysis, if a full-time childcare worker begins saving today to buy a median-priced home, it will take them until 2055 to bank enough cash for a home deposit, even after considering the government’s recent decision to raise the pay grade for this profession.
The Parliamentary Library has factored in long-term wage and house price growth trends in making its determinations, using the median all-dwelling price of $742,000.
Additionally, it also has examined what share of income the average repayment will account for to make mortgage payments on a median-priced home.
Taking the child care worker as an example, the analysis concludes that buying an average Australian home is simply out of reach, given that even if they have the deposit today, repayments on the average mortgage will consume 92 per cent of their earnings.
Not one of the more than 2 million Australians in any of the top 10 most common professions in Australia will be able to afford average mortgage repayments on a single salary without falling into housing stress, which is determined as spending at least 30 per cent of income on housing costs.
A primary school teacher will need to save until 2036 to save for a home deposit on the average Australian home. To take out a home loan today, they will pay 53 per cent of their monthly pay packet going towards home loan repayments.
For a nurse, saving for a deposit will take until 2035, while 50 per cent of their income will go towards making repayments.
Sales assistants are determined to “never” be able to afford the average cost of a house, given that the growth of house prices is expected to exceed that of wages.
The analysis puts the challenge of home ownership for average Australians into sharp focus, and makes it particularly clear how challenging this endeavour is for single parents. With the median Australian home of a size that is expected to accommodate a family, it’s generally assumed that more than one income is required to service a home loan and living expenses. Single-income households comprising one person may generally be looking at a smaller (and therefore less expensive) home than the median. Single parents, however, are stretched by their sole income as well as the need for space to accommodate children.
According to Greens representative Max Chandler-Mather, the results of this research show that “in practice, the analysis demonstrates that home ownership is completely unattainable for many of the country’s most common and essential professions”.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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