Parliamentary Library analysis of ATO income data, RBA lending and CoreLogic house price data has found that none of the top 10 most common professions in Australia can afford to buy a house and avoid housing stress.

The analysis found that if a full-time childcare worker began saving today to buy a home, it would take them until 2055 to save for a home deposit, even after factoring in the government’s recent pay rise decision. Even if they were able to take out a mortgage today, repayments on that mortgage would consume 92% of their earnings.

The analysis looks at the time it would take for each of the top ten most common professions in Australia to save for a home deposit on the average Australian home, assuming long-term wage and house price growth trends continue, as well as the share of their income it would take for them to make repayments on a mortgage for a median-priced home..

It reveals that not one of the more than two million Australians in any of the top 10 most common professions in Australia would be able to afford mortgage repayments on the average Australian home without falling into housing stress (spending at least 30% of their income on housing costs). 

For a primary school teacher, it would take until 2036 to save for a home deposit. If a primary school teacher were to take out a home loan today, they would pay 53% of their income on home loan repayments, forcing them into severe financial stress. 

For a nurse, saving for a deposit would take until 2035, and on a home loan today they would pay 50% of their income making repayments.

In practice, the analysis demonstrates that home ownership is completely unattainable for many of the country’s most common and essential professions. 

For a sales assistant, the most common profession in Australia, it shows they may “never” be able to save for a home deposit, due to the growth of house prices at a rate faster than wages.

The Greens are demanding action from Labor on the renting and housing crisis, including a 2 year freeze on rent increases followed by an ongoing cap on rent increases, and winding back of negative gearing and capital gains tax concessions for property investors that are denying millions of renters the chance to buy a home. A PBO costing found that the total cost of negative gearing and the capital gains tax to the federal budget over the next 10 years will be $165 billion.

The Greens plan also includes establishing a public property developer to build 710,000 homes over the next ten years, with rents capped at 25% of a tenants income and homes sold just above the cost of construction. Homes built by the public developer would save $5,200 a year for a renter and $260,000 for a first home buyer. 

Lines attributable to Max Chandler-Mather, Greens spokesperson for Housing:

"For far too many the Australian dream of owning a home is dead, and it’s been killed by Labor and the Liberals with tax handouts to property investors. 

"Since Howard introduced the capital gains tax discount in 2000 house prices have surged ahead of wages, locking out millions of people from home ownership. 

"These tax handouts are $165 billion worth of fuel that Labor is pouring on the raging fire that is Australia’s housing crisis, and until Labor scraps them, we’ll never get it under control.

"Labor pretends to care about home ownership but the reality is they are giving property investors billions of dollars in tax handouts that turbocharge house prices and deny childcare workers, nurses and teachers the chance to buy a home. 

"Millions of renters have been caught in a cruel trap, stuck paying massive rents, at best decades away from saving for a home, where even if they can get a mortgage the repayments are completely unaffordable. 

"How long do the millions getting screwed by Australia’s broken housing system have to wait for this painfully unambitious government to grow a spine and start taking real action on the housing crisis? 

"The ball is in Labor’s court, the Greens are ready to negotiate a plan that actually helps people, but we won’t just rubber stamp two bills that will drive up rents and house prices. 

"The Greens are ready to work with Labor to phase out the tax handouts to property investors and use the savings to invest in quality government built homes that can be sold and rented for cheap, which is a plan supported by a large majority of the country.

"Right now Labor and the Liberals are on the side of property investors, and the Greens are on the side of the millions of teachers, nurses, childcare workers, and retail workers who just want an affordable home.

Table 2: Years to save 20% deposit, by Occupation  

(a)    Projections for Child Carers’ earnings include a 10 per cent increase from in 2025 and a further 5 per cent increase in 2026

(b) Due to the exponential nature of the trend, it is possible that those on low income will never be able to save a 20% deposit, on average earnings for their occupation

(c) Assuming wages and house prices grow according to constant annual percentage increase, based on 20 year trend

Data sources:

Incomes by occupation based on 2021-22 ATO Taxation statistics, adjusted using to 2024 using ABS Average Weekly Earnings data

House price data based on CoreLogic Property Market Indices 

Interest rates based on RBA indicator lending rates series: standard variable housing loan rate, as quoted to owner-occupiers (without discounting)

Most common occupations based on 2021 Census

Methodology:

Mortgage payment estimates assume a 20% Deposit and a loan term of 30 years

Years to save a deposit assumes 15% of Earnings is saved each year.

Individuals spending more than 30% of income on mortgage payments are in housing stress