Have your wages kept pace with post-Covid growth in Geelong

News.com.au

a day ago

The level of household income needed to comfortably afford to break in to the property market in Geelong has risen over the past five years despite home prices remaining in the doldrums.
Exclusive Canstar research reveals how much wages have failed to keep pace with the property market in the five years since the start of the pandemic.
More tellingly, it reveals how much outside of actual home prices impacts people's ability to break in to the market.
The figures show the level of household income to buy in a suburb of Geelong and pay less than 30 per cent on mortgage repayments has risen between about $40,000 to almost $140,000, depending on the suburb you buy in.
Four suburbs require an income of less than $100,000 – Norlane, Corio, Thomson and Whittington.
But the amount required has climbed between $37,000 and $44,000 in the past five years.
A median priced house in Armstrong Creek requires a $121,000 household income, a $51,000 increase, while a similar rise pushes the annual wage to buy in Belmont to $130,000.
A typical household income required to buy in Geelong West rose $66,000 to $158,000.
But the biggest rise was in Manifold Heights, where the median house price has reached $1.26m off the back of a sharp rise this year.
A household now needs a $235,000 income to comfortably afford to buy in this high-end suburb.
Canstar director of research Sally Tindall said the study showed the widening generational wealth gap.
'It is astonishing to see just what kind of income is required to get a foot on the property ladder these days,' Ms Tindall said.
'My concern is that this is shutting people out. It creates this divide between those already in the property market and those that are struggling to land a foot on the property ladder.
'What we are seeing anecdotally is that those families who have property are passing down the wealth they have created through home ownership down generations, further deepening that divide,' Ms Tindall said.
'The Bank of Mum and Dad is becoming more of a thing.'
At $720,000, Geelong's median house price is 23 per cent higher than it was in 2020, even though it's 9 per cent lower than three years ago.
Part of what was fuelling the incredible rise in property prices was the burgeoning amount of equity upgraders had behind them to channel into their next purchases, Ms Tindall said.
'Very few people have had the kind of pay rises needed to keep pace with the market. For most people, the only way they've kept up is because they already own property. Success breeds success.'
The problem for first-home buyers was that getting a foot on the first rung of the property ladder was becoming more challenging, robbing them of the chance to also benefit from future equity gains, she said.
'Fundamentally, the issue facing first-home buyers across the country is that prices are too high and their wages can't keep up.
'There are a range of complex reasons we have this problem, but one of the primary factors is that we don't have enough housing supply and we are not building enough to satisfy demand.'
Zippy Financial principal broker Louisa Sanghera said more buyers were amassing smaller deposits and paying lenders mortgage insurance to get in sooner.
'Waiting for a 20 per cent deposit isn't realistic anymore,' she said. 'If they wait, the market moves on without them.'
Ms Sanghera said even strong earners were hitting serviceability roadblocks.
'Banks are stress-testing at nine per cent,' she said.
'Add rising living costs, and many buyers can't borrow what they'd hoped.'
Have your wages kept pace with post-Covid growth
Suburb Property type Median value Gross income needed Difference in gross income over five years
Anglesea H $1,350,000 $252,188 $121,110
Armstrong Creek H $650,000 $121,424 $51,203
Bannockburn H $785,000 $146,643 $69,066
Barwon Heads H $1,420,000 $265,264 $114,123
Bell Park H $611,000 $114,139 $49,034
Bell Post Hill H $660,000 $123,292 $58,421
Belmont H $700,000 $130,764 $55,996
Charlemont H $615,500 $114,979 $43,421
Clifton Springs H $652,600 $121,910 $55,969
Corio H $490,000 $91,535 $43,785
Curlewis H $638,250 $119,229 $45,932
Drysdale H $710,000 $132,632 $51,377
East Geelong H $765,000 $142,907 $55,967
Geelong H $880,000 $164,389 $70,561
Geelong West H $850,000 $158,785 $66,495
Grovedale H $663,000 $123,853 $54,301
Hamlyn Heights H $720,000 $134,501 $60,936
Herne Hill H $700,000 $130,764 $59,373
Highton H $861,000 $160,840 $67,413
Indented Head H $700,000 $130,764 $48,439
Jan Juc H $1,270,000 $237,244 $115,528
Lara H $680,000 $127,028 $54,667
Leopold H $650,000 $121,424 $51,872
Lorne H $1,557,500 $290,950 $98,011
Lovely Banks H $840,000 $156,917 $79,741
Manifold Heights H $1,260,000 $235,376 $138,739
Marshall H $630,000 $117,688 $52,416
Mount Duneed H $700,000 $130,764 $54,993
Newcomb H $550,000 $102,744 $42,488
Newtown H $1,150,000 $214,827 $95,118
Norlane H $451,000 $84,250 $37,436
North Geelong H $610,000 $113,952 $40,655
Ocean Grove H $955,000 $178,400 $84,505
Point Lonsdale H $1,207,500 $225,568 $112,546
Portarlington H $863,500 $161,307 $77,878
St Albans Park H $585,000 $109,282 $52,403
St Leonards H $720,000 $134,501 $60,268
Teesdale H $990,000 $184,938 $92,314
Thomson H $512,500 $95,738 $40,698
Torquay H $1,175,000 $219,497 $111,090
Wandana Heights H $925,000 $172,796 $66,027
Waurn Ponds H $765,500 $143,000 $57,063
Whittington H $529,000 $98,821 $44,082
Winchelsea H $650,000 $121,424 $61,235
Have your wages kept pace with post-Covid growth
Suburb Property type Median value Gross income needed Difference in gross income over five years
Bell Park U $507,000 $94,711 $42,547
Belmont U $538,000 $100,502 $44,593
Drysdale U $547,500 $102,277 $48,107
Geelong U $615,000 $114,886 $44,532
Geelong West U $387,500 $72,388 $17,549
Grovedale U $496,250 $92,703 $36,551
Hamlyn Heights U $530,750 $99,148 $38,892
Herne Hill U $368,000 $68,745 $29,956
Highton U $500,000 $93,403 $38,564
Lara U $447,500 $83,596 $33,104
Leopold U $483,000 $90,228 $37,395
Newcomb U $478,000 $89,294 $39,805
Newtown U $575,000 $107,414 $47,894
Norlane U $380,000 $70,987 $30,861
Ocean Grove U $741,000 $138,423 $54,158
Torquay U $880,000 $164,389 $75,844
Whittington U $365,000 $68,185 $27,390