'Highly paid jobs' needed to buy houses in Michael Sukkar's electorate

The man assigned to solve Australia’s housing affordability issues might be right: young people do need a “highly paid job” — or two — to get a foot on the property ladder, especially in his own backyard.

Michael Sukkar, the assistant minister to the Treas­urer, will be a key architect of the federal government’s housing affordability policies and yesterday said a highly paid job was the first step for a young people to buy a house.

But perhaps a few key facts passed him by: house prices in many of the suburbs in Mr Sukkar’s own electorate of Deakin, in Melbourne’s east, are increasingly out of reach for first homebuyers. Prices there are on the rise faster than Melbourne’s average.

And agents in the area say first homebuyers can generally only afford to buy houses by relying on their parents or partnering up to purchase with two strong incomes.

All of the suburbs in Deakin have median house prices above $600,000. The average quarterly purchase price of a Victorian first home buyer, with a 20 per cent deposit, was $406,516 last year.

Several suburbs in the electorate, such as Blackburn, Blackburn North and Vermont South, have a median over $1 million, Domain Group data shows. Seven suburbs, including traditional first homebuyer heartlands Bayswater North, Croydon and Ringwood North, have grown annually at rates faster than the Melbourne average of 10.3 per cent. 

Domain Group chief economist Andrew Wilson said there had been significant price growth in Melbourne’s outer east and the majority of these suburbs were areas for change-over or trade-up buyers — not first homebuyers — who had the advantage of already having a deposit.

“If you don’t have a deposit and you’ve got to save 20 per cent of the median, which in some cases is around $1 million, that’s a hell of a lot of savings and you’d need a pretty impressive job to be able to do that,” Dr Wilson said.

“With incomes being very flat, you’d have to be looking at a politician’s income to do that.”

Mr Sukkar’s comments follow past advice for first home buyers from the government, which includes getting a good job (remembering, of course, that poor people don’t drive) asking parents to shell out and moving to Tamworth to fulfil the aspiration of home ownership.

Jellis Craig Blackburn director Stephen Le Get said the handful of first homebuyers in the Blackburn area were mainly getting financial help from parents.

“In other areas further out east, first home buyers are getting in under that $600,000 cap,” Mr Le Get said, referring to $600,000 cut off for stamp duty savings.

“However, we do see some first home buyers getting into that $600,000 to $1 million bracket because they’re being helped out by other family memebers.”

Entry-level properties in Blackburn, such as two-bedroom one-bathroom unit, start at about $650,000, he said. 

“To find a house on its own block, you need minimum of $950,000 to a $1 million,” he added.

His office last week auctioned a modest two-bedroom home on a 639 square-metre block, with six bidders pushing the price to $1.28 million. 

And though a highly paid job alone may not be enough to service a mortgage in Blackburn, agents say first timers heading further east also need at least two incomes to afford a house.

The average age of first homebuyers in the eastern suburbs has risen in step with house prices, according to Barry Plant Croydon’s James Brougham.

“Mainly the first homebuyers coming through are in their 30s, most of them will be couples in long-term relationships with two incomes and perhaps no children,” Mr Brougham said.

“In the last few years there’s been less and less people buying in their early 20s, but when there is, the story is always the same: they had a job from when they were 16 and they saved and saved, and got really good advice from their parents.”

Mr Sukkar bought for the first time in Fitzroy North: an area not exactly known as first homebuyer heartland.