How Much Do You Really Need to Earn to Afford a $1 Million Property?

With more suburbs reaching the million-dollar mark, many potential homebuyers are left wondering just how much they need to earn to join the million-dollar homeowners club.

You may be surprised to learn that the salary required to buy a $1 million property isn't as high as you might think.

What does it take to buy a $1 million home?

According to new data from Money.com.au, the numbers reveal that to purchase a $1 million home with a 10% deposit ($100,000), a household pre-tax income of around $187,000 is required.

That’s about $93,500 per applicant if two people are sharing the mortgage, which is actually below the average Australian full-time salary of $100,016.

But let’s break this down further.

If you can save up a 20% deposit ($200,000), you’d need a pre-tax household income of $165,000, or $82,500 per applicant.

This would allow you to avoid the added cost of Lender’s Mortgage Insurance (LMI), making the property purchase more cost-effective in the long run.

These estimates assume an average variable mortgage rate of 6.27% over a 30-year term and that your combined monthly living expenses are around $4,000 with no dependents or other debts.

Of course, stamp duty and other government charges come as extra costs on top of your deposit and income requirements.

What’s really the challenge?

The real hurdle for most aspiring homeowners isn’t necessarily earning enough to service a mortgage—it’s coming up with the deposit.

As Money.com.au’s Home Loans Expert, Mansour Soltani points out:

"Saving up for a deposit of $100,000 or $200,000 can be a significant challenge, especially with rising living costs."

The property market is becoming increasingly competitive, and million-dollar homes are quickly becoming the norm across the country.

But before you start thinking you need to chase after the next million-dollar property, Soltani also offers some sage advice:

"Sometimes, it’s wiser to target a home under $1 million in a less fashionable suburb to avoid overextending your finances.

The key is not to get swept up in the property frenzy, but rather, to make a decision based on what is financially sustainable for your lifestyle."

How common are million-dollar homes?

According to CoreLogic’s latest Million-Dollar Markets report, almost a third of Australian suburbs now have a median property value at or above $1 million.

Out of 4,772 suburbs analysed, 29.3% have crossed that threshold.

Over the past year, the number of these so-called "million-dollar markets" has grown by 18.5%, with 1,257 suburbs now in the million-dollar club—up from 1,057 just a year ago.

What does this mean for you?

For those looking to get into the property market, it’s clear that million-dollar homes are no longer an exclusive club reserved for the very wealthy.

However, careful financial planning is essential.

With interest rates currently hovering around 6.27% and ongoing living expenses, managing the repayments is just as crucial as saving for that deposit.

If you're considering purchasing a property, it’s essential to be realistic about your financial capacity and long-term plans.

As million-dollar homes become more common, it might be time to rethink the traditional definition of "affordable housing" and adjust expectations accordingly.

Ultimately, buying a home—even a million-dollar one—is within reach for many Australians, but only if they approach it with the right strategy.

So, take a step back, assess your financial situation, and consider all your options before diving into the market.

About Leanne Spring Leanne is a highly experienced Buyers Agent in the Brisbane Real Estate market. Leanne became a passionate lover of property in 2001. Since then, both professionally and personally, she has been involved in all aspects of property including purchasing, negotiating, renovating, and selling.