Buying a home in Melbourne is becoming increasingly out of reach for single-income earners. A new analysis reveals that solo homebuyers have been priced out of almost every corner of Australia’s second-largest city.
The Harsh Reality For Solo Homebuyers
The data paints a concerning picture of Melbourne’s housing affordability crisis. Based on average solo incomes and mortgage lending criteria, only a tiny fraction of suburbs now have median prices under $400,000 – the upper limit of what single buyers can afford.
This represents a dramatic decline in affordability over the past decade. Back in 2012, solo homebuyers could choose from over 50 suburbs with median prices below $400k. Today, that number has dwindled to just two – Melton and Melton South on the city’s far western fringe.
Why Singles Have Been Squeezed Out
Several factors have conspired to make homeownership extremely challenging for Melbourne’s single population.
- Rapid house price growth has far outpaced income growth. Since 2012, Melbourne’s median has surged by around 70% while wages have increased by less than 20%. This widening gap makes saving for a deposit and managing mortgage repayments much harder.
- Investors and upsizers have crowded out first home buyers in many established suburbs. Fierce competition from these groups, often able to offer bigger budgets, has priced many singles out of areas they previously could afford.
- The pandemic accelerated the shift towards remote work. This allowed more affluent households to upgrade to larger homes further from the CBD, pushing prices up dramatically in outer and regional areas once within reach of average single incomes.
The Social Impacts
This squeeze on solo homebuyers is concerning not just economically, but socially. Safe, stable housing is a basic human need, and homeownership remains an important milestone and wealth-builder for many Australians.
Pricing singles out of the housing market risks entrenching intergenerational inequality and reducing social mobility. Younger Australians already face an uphill battle saving for a deposit while paying high rents. Stretching the goal posts even further could see homeownership permanently out of reach for many.
There are also worries that declining affordability will exacerbate loneliness and disconnection. A home provides a sense of security and identity, and enables stronger community ties. Locking singles out of ownership inhibits their ability to truly settle and put down roots.