Buying a home when single is unattainable in most of Australia, data shows

If you’re single, on an average income and looking to buy a home, your dream is likely unattainable in six of Australia’s capital cities, a new analysis shows.

Just Hobart and Adelaide allow an average income earner to buy a median-priced house alone, a measurement of official house price data and mortgage costs by comparison website RateCity found.

In Sydney, a home buyer would need a salary well in excess of six figures to comfortably make repayments.

The analysis considered the salary required to afford repayments on a 30-year loan and for an individual to not spend more than a third of their income on housing costs – a figure widely seen as the cut-off for housing stress.

In Melbourne and Brisbane, the home buyer would need a $96,706 and $80,866 salary respectively. In Sydney, single home buyers needed to earn in excess of $135,000 to fund their mortgage.

In Canberra, home buyers needed to earn $97,756 a year.

And these salaries were calculated in a record low interest rate environment, where the average variable rate was 4.74 per cent, RateCity data insights director Peter Arnold said.

“Our analysis reveals a reality that many young Australians are now living; the impossibility of affording a median-priced house on an average salary in most capital cities,” Mr Arnold said.

“Without a partner or family member to share mortgage costs with, the numbers paint a grim picture for millennials, many of which may be squeezed out. Even as part of a couple, east coast property prices are out of reach for many Australians,” he said.

And while Sydney has some of the highest income levels in the country, it also has some of the highest living costs – including rent, First Home Buyers Australia co-founder Taj Singh said.

For a single person looking to buy, they’ll also have to face paying council rates and strata levies without the assistance of a partner.

“With the tighter lending standards, the lenders definitely prefer double applicants for owner-occupied housing loans – as it reduces their risk is lending money and it also has the impact of increasing the borrowing power,” Mr Singh said.

As a greater proportion of younger Australians are marrying later in life, it’s likely this is also delaying their home ownership.

A survey of 500 aspiring home buyers conducted by the FHBA found 71 per cent wanted to buy a first home with a partner. For those buying alone, Mr Singh said it was likely time to compromise, consider investing instead or to tap into the bank of mum and dad.

Or, home buyers could consider joining forces with someone who isn’t their romantic partner, director of Advocate Property Services Jo Vadillo said.

“To get yourself on the property ladder a joint venture with family or friends can really be the springboard for singles,” Ms Vadillo said.

Speaking to an independent solicitor ahead of time, considering income protection and writing a will would also be crucial, she said.

Buying an investment property and renting at the same time, or rentvesting, would also be an alternative for those priced out of the city as a single.

“You can start small and build from there and it can absolutely be a solo mission – I have walked in those shoes and still own my first purchase.”

Five things singles can do to get on the ladder

• Team up with siblings or close friends and buy a property together
• Ask your parents to go guarantor
• Avoid rent by staying at home with your parents, house-sitting or moving into a sharehouse to reduce rent costs.
• Increase your income with a second job, additional training or sideline business.

Source: RateCity