Australian house price growth

Australian house price growth outpaced wage growth in the last financial year

PHOTO: House prices outstripped wage growth in almost every capital city. Photo: Peter Rae.

Australian house prices have outperformed wages over the past financial year, pushing home ownership further out of reach for some, new analysis shows.

In every capital city but two, house price growth was stronger in the year to June than wages growth, even despite the COVID-19 pandemic that has seen dwelling prices tumble and pushed the nation into recession.

Sydney house prices finished the financial year 10.5 per cent higher than the previous year, Domain data shows. But wages for NSW workers inched up just 1.8 per cent over the same period, ABS figures show, leaving housing outperforming wages by 8.7 percentage points.

Melbourne house prices were 6.9 per cent higher in June than a year ago, but Victorian workers’ wages only grew 1.8 per cent, meaning housing again outpaced income by 5.1 percentage points.

The wages data measures hourly earnings and does not take into account widespread cuts to hours made during the coronavirus crisis, JobKeeper payments and job losses, suggesting the outlook for many home-buying hopefuls could be even worse.