How much income is required to service a mortgage? It depends on where you live
New research suggests spending 40 percent of household income on loan repayments is the new normal
3 min
Requiring more than 30 percent of household income to service a home loan has long been considered the benchmark for ‘housing stress’. Yet research shows it is becoming the new normal. The 2024 ANZ CoreLogic Housing Affordability Report reveals home loans on only 17 percent of homes are ‘serviceable’ if serviceability is limited to 30 percent of the median national household income.
Based on 40 percent of household income, just 37 percent of properties would be serviceable on a mortgage covering 80 percent of the purchase price. ANZ CoreLogic suggest 40 may be the new 30 when it comes to home loan serviceability. “Looking ahead, there is little prospect for the mortgage serviceability indicator to move back into the 30 percent range any time soon,” says the report.
“This is because the cash rate is not expected to be cut until late 2024, and home values have continued to rise, even amid relatively high interest rate settings.” ANZ CoreLogic estimate that home loan rates would have to fall to about 4.7 percent to bring serviceability under 40 percent.
CoreLogic has broken down the actual household income required to service a home loan on a 6.27 percent interest rate for an 80 percent loan based on current median house and unit values in each capital city. As expected, affordability is worst in the most expensive property market, Sydney.
Sydney
Sydney’s median house price is $1,414,229 and the median unit price is $839,344.
Based on 40 percent serviceability, households need a total income of $211,456 to afford a home loan for a house and $125,499 for a unit. The city’s actual median household income is $120,554.
Melbourne
Melbourne’s median house price is $935,049 and the median apartment price is $612,906.
Based on 40 percent serviceability, households need a total income of $139,809 to afford a home loan for a house and $91,642 for a unit. The city’s actual median household income is $110,324.
Brisbane
Brisbane’s median house price is $909,988 and the median unit price is $587,793.
Based on 40 percent serviceability, households need a total income of $136,062 to afford a home loan for a house and $87,887 for a unit. The city’s actual median household income is $107,243.
Adelaide
Adelaide’s median house price is $785,971 and the median apartment price is $504,799.
Based on 40 percent serviceability, households need a total income of $117,519 to afford a home loan for a house and $75,478 for a unit. The city’s actual median household income is $89,806.
Perth
Perth’s median house price is $735,276 and the median unit price is $495,360.
Based on 40 percent serviceability, households need a total income of $109,939 to afford a home loan for a house and $74,066 for a unit. The city’s actual median household income is $108,057.
Hobart
Hobart’s median house price is $692,951 and the median apartment price is $522,258.
Based on 40 percent serviceability, households need a total income of $103,610 to afford a home loan for a house and $78,088 for a unit. The city’s actual median household income is $89,515.
Darwin
Darwin’s median house price is $573,498 and the median unit price is $367,716.
Based on 40 percent serviceability, households need a total income of $85,750 to afford a home loan for a house and $54,981 for a unit. The city’s actual median household income is $126,193.
Canberra
Canberra’s median house price is $964,136 and the median apartment price is $585,057.
Based on 40 percent serviceability, households need a total income of $144,158 to afford a home loan for a house and $87,478 for a unit. The city’s actual median household income is $137,760.
International AI strategist Justin Kabbani will headline the Kanebridge Property Summit in Sydney on June 18, with tickets selling fast.
Scotch whisky expert, luxury hospitality strategist and Keeper of the Quaich inductee Ross Blainey is bringing a new philosophy of luxury experiences to Citizen Kanebridge.
International AI strategist Justin Kabbani will headline the Kanebridge Property Summit in Sydney on June 18, with tickets selling fast.
2 minArtificial intelligence is rapidly reshaping business, investment and competitive advantage, and now Australia’s property industry is being told it cannot afford to sit on the sidelines.
International keynote speaker and AI strategist Justin Kabbani will headline the Kanebridge Property Summit at RACA Sydney on June 18, bringing rare insight into how forward-thinking property professionals can use AI to move faster, make smarter decisions and gain a serious edge in an increasingly competitive market.
Tickets to the exclusive summit are already selling fast.
Having worked with global brands including Uber, PepsiCo, Mattel and Destination NSW, Kabbani has become one of the leading voices on how businesses can turn AI from a buzzword into a genuine commercial advantage.
Known for his high-energy and highly practical presentations, Kabbani cuts through the hype surrounding AI and focuses on what actually matters: productivity, growth, leadership and real-world business results.
His keynote will explore how AI is already transforming industries globally, and what property developers, investors, agents and business leaders need to understand now to avoid being left behind.
Importantly, the session is designed to be practical, not theoretical.
Attendees will hear how AI can be applied across marketing, sales, operations and decision-making to improve efficiency, sharpen strategy and create new competitive advantages in a rapidly changing business environment.
The summit will also feature an exclusive roundtable bringing together leading property and finance experts for a candid, off-the-record Q&A exploring the forces shaping investment, development and wealth creation across Australia’s prestige property market.
The event follows the success of last year’s sold-out summit and will once again be hosted by respected MC John Alten.
With AI becoming one of the biggest disruptors facing business, the June 18 summit is expected to attract strong interest from property professionals, investors and business leaders looking to stay ahead of the curve.
The followings are included in every ticket:
- Full access to keynote sessions and the interactive roundtable.
- Premium selection of canapés and beverages throughout the evening.
- Complimentary annual digital subscription to two leading publications (Wall Street Journal and Kanebridge Quarterly), providing essential coverage of local and global markets, property trends and investment strategy.
Tickets are limited and selling quickly and you can buy here.
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