What a $125,000 Income Can Actually Buy in Australia: 2026

On 5 September the realestate.com.au Housing Affordability Report 2026 put a number on something most buyers already felt. A household on the national median income, just over $125,000 a year, could afford to make repayments on 12% of the homes sold in FY26. That is the lowest share since the series began in FY95, below the 14% low of FY08, and a long way from the 43% the same household could reach in FY21 when mortgage rates were at record lows. Households at the 30th income percentile, on $76,000, could afford 2%.

Those are shares of sales. We wanted to see the same budget on a map. So we took the report's own assumptions, worked out the purchase price a $125,000 household can service, and tested every suburb where we hold a reliable sale median against it. The question is not "what share of homes" but "which suburbs": where can a median-income household buy the median house, and how good are those suburbs to live in once they get there?

The short answer: 93 of the 1,726 suburbs with a reliable house median (5.4%), and 91 of those 93 are regional. Units change the picture considerably. The detail, and the suburbs, are below.

How we measured it

The report's affordability test, set out in its methodology, is a household spending 30% of gross income on mortgage repayments, assessed at the average new variable owner-occupier rate at the end of the financial year plus a 2.5 percentage point buffer, with a 20% deposit already saved. We used exactly that:

A suburb counts as affordable when its median house price (or median unit price, in the unit tables) is at or below $494,000. Candidates are suburbs with at least 2,000 residents and a reliable stabilised trailing median (at least five recent recorded sales), with CBD-style commercial hubs excluded. That gives 1,726 suburbs on house medians and 1,162 on units.

Three things to hold onto while reading:

• Coverage. We hold suburb-level sale medians for NSW, Victoria and metropolitan South Australia (houses only in SA). Queensland, WA, Tasmania, the NT and the ACT publish no free suburb-level sales data, so they are absent, and "national" in this post means those three states, just over 60% of Australia's population. Brisbane and Perth do not appear for that reason, not because they were excluded.
• A suburb median is stricter than a share of sales. The report counts every home sold; a suburb only counts here if its *typical* house is within reach. Half the sales in any suburb sit below its median, so a 5.4% suburb count is not comparable with the report's 12% of sales. They answer different questions.
• This is a simplified model, not financial advice. Stamp duty, lenders mortgage insurance, HECS debt, other liabilities, dependants and each lender's own policy all move real borrowing capacity, in both directions. Treat the $494,000 line as a benchmark for comparing suburbs, not as a quote.

The national picture

Of 1,726 suburbs with a reliable house median, 93 (5.4%) have a median a $125,000 household could service. Of 1,162 suburbs with a unit median, 207 (17.8%) do.

The chart above shows the same shares. The geography inside them is the real story. Of the 93 affordable house suburbs, two sit inside a capital city, Melton South and Melton on Melbourne's western fringe. Across the 1,202 capital-city suburbs with a house median, that is 0.2%. Across the 524 regional suburbs it is 17.4%. A median income buys a median house in roughly one regional suburb in six, and in almost no metropolitan one.

What that budget buys, in scores, is also worth knowing before the tables. Comparing the 93 affordable house suburbs with the 1,633 unaffordable ones:

None of the 93 scores 90 or better on liveability; 459 of the unaffordable suburbs do. The affordable set is, on average, a smaller regional town a long way from a capital, with thinner amenity and weaker school access. The point of the next section is that the average hides a good deal of variation.

The best suburbs you can afford

The 93 affordable house suburbs ranked by Liveability Score, which measures walkable amenities, green space, transport access and climate, benchmarked within each state. Safety and schools get their own columns because liveability deliberately leaves them out.

Regional Victoria owns this list. Ballarat supplies Redan, Wendouree and Sebastopol; Bendigo supplies Long Gully and California Gully; Geelong's northern suburbs (Norlane, and Corio just outside the top 20) sit within an hour of Melbourne by train. Traralgon, Sale, Shepparton and Mildura are full regional service centres with populations from 14,000 to 35,000. On the NSW side the entries are inland towns: West Tamworth, Inverell, Cowra, Parkes, Cootamundra and, at $231,000, Broken Hill, the cheapest liveable town in the country on our data.

Read the Safety column before you fall for the liveability figure. Redan scores 89 for liveability and 18 for safety; West Tamworth and Norlane pair 79 to 83 liveability with a Safety Score of 5, the floor of the scale. These are the amenity-rich, lower-income sides of their regional cities, and the crime rates come with the territory. The same pattern shows up in our Melbourne value ranking, where Dandenong's 95 liveability sits beside a Safety Score of 15.

Affordable and safe

Thirty-five of the 93 have a Safety Score of 60 or better, but most of those are small towns with modest liveability. Only five clear 60 on both:

Hamilton in Victoria's Western District is the standout: a Safety Score of 87 and liveability of 67 at $359,000, roughly a third of the national priced median. Schools are the weak spot across the whole affordable set. Just five of the 93 reach a School Score of 50 (Redan, Corio, Sebastopol, Long Gully and Irymple), and only Irymple, outside Mildura, manages that alongside a Safety Score above 60. Families on a median income are choosing between school access and price almost everywhere on this list.

Units change the story

Switch to unit medians and the map fills in, especially close to the two big cities. Of the 207 affordable unit suburbs, 54 sit inside a capital (45 in Melbourne, 9 in Sydney), and the capital-city entries have a median Liveability Score of 84 against 61 for the regional ones. Twenty-eight affordable unit suburbs score 90 or better on liveability. No affordable house suburb does.

A Travancore unit at $365,000 carries a Liveability Score of 98 and a School Score of 97, four kilometres from Melbourne's CBD. Kingsville, Carlton, Flemington and Brunswick West all sit within seven kilometres at the same liveability tier. In Sydney, Cabramatta pairs a perfect 100 for liveability with a Safety Score of 82 at $490,000, the best combination of amenity, safety and price of any capital-city entry in this post. The regional university and gold-rush cities show up too: Ballarat Central, Armidale, Bendigo and Bathurst all offer 94-plus liveability at $480,000 or less.

The usual caveats apply. A unit median describes the typical unit sold, often older and smaller than the block being marketed today, and strata levies sit on top of the mortgage. In several of these suburbs the house median runs two to three times the unit figure, so the unit is the entry point and, for a median income, the only point.

City by city

Sydney. No Greater Sydney suburb has a house median a $125,000 household could service. The cheapest, San Remo on the Central Coast, is $808,000. The median priced Sydney suburb sits at $1.71M, which under the same assumptions needs a household income around $430,000. Units offer nine suburbs out of 476 (1.9%), clustered in the Fairfield, Cumberland, Liverpool and Blacktown council areas: Cabramatta, Warwick Farm, Carramar, Fairfield, Merrylands West, Mount Druitt, Guildford, Ruse and Blue Haven. Six of the nine score 90 or better on liveability, and Cabramatta, Fairfield and Merrylands West pair that with Safety Scores of 67 to 82.

Melbourne. Two of 373 house suburbs: Melton South ($493,000, liveability 80) and Melton ($463,000, liveability 50), both 34 to 37 kilometres out on the Ballarat line. Fourteen Melbourne suburbs have a house median under $600,000 and 63 under $700,000, so a modest income rise or a larger deposit opens a real outer-west and south-east choice, as our value ranking documents. The median priced Melbourne suburb, at $997,000, needs a household income around $250,000. Units are where Melbourne separates from every other capital: 45 of 297 unit suburbs (15.2%) are within reach, 13 of them at 90-plus liveability and six within ten kilometres of the CBD.

Adelaide. None of the 241 metropolitan suburbs with a reliable house median falls under $494,000. The cheapest are Smithfield Plains ($589,000), Elizabeth North ($610,000), Elizabeth Downs ($619,000), Elizabeth Grove ($620,000) and Davoren Park ($624,000). Only one metro suburb sits under $600,000 and 18 under $700,000. This lines up with the report, which names South Australia the least affordable state: SA's median household earns about $103,000, well under the $125,000 used here, and could afford 7% of homes sold. Our SA data is house-only, so there is no unit table for Adelaide.

Brisbane and Perth. Queensland and WA do not publish free suburb-level sale medians, so we cannot run this test there. For the record, the report puts the median-income household's affordable share at 9% of homes sold in Queensland (down from 15% a year earlier) and 10% in WA, which had been the most affordable state from FY19 to FY25.

The $76,000 reality

The report's 30th percentile household, on $76,000, can service a loan of about $240,000 and a purchase of about $300,500 under the same assumptions. That covers the median house in seven of 1,726 suburbs (0.4%), none of them in a capital city:

Broken Hill is the only one with big-town amenity, and it comes with a Safety Score of 6 and a 900-kilometre drive to Sydney. Nhill, Kerang and St Arnaud are the quiet, safe end of the Wimmera and Mallee. Units add 22 suburbs (1.9% of those with a unit median). One is in a capital: Albion in Melbourne's Brimbank, where a $292,000 unit median buys a Liveability Score of 90 and a School Score of 77, 14 kilometres from the CBD. The rest are regional, led by Traralgon ($295,000, liveability 79), Horsham ($300,000) and the Latrobe Valley trio of Morwell, Moe and Newborough, all between $219,000 and $246,000.

Victoria, now the most affordable state

The report's most striking state finding is that Victoria has become Australia's most affordable state for the first time since its records began in FY95, overtaking WA. A median-income Victorian household could afford 16% of homes sold, down from 19% a year earlier but ahead of every other state, a result of Melbourne prices finishing June 2026 back where they started 2025.

Our suburb-level data says the same thing from the other direction. Victoria has 10.2% of its priced house suburbs and 31.0% of its unit suburbs within a $125,000 household's reach; NSW has 4.0% and 10.9%; metropolitan SA has none. Regional Victoria alone supplies 53 of the 93 affordable house suburbs in this analysis, with the Latrobe Valley (five suburbs), the Wellington shire around Sale (five), Mildura (four) and Ballarat, Bendigo, Shepparton and East Gippsland (three each) doing most of the work. Melbourne offers two house suburbs against Sydney's none and Adelaide's none, and 45 unit suburbs against Sydney's nine.

Cross-check: the Melbourne value list

Last month we ranked Melbourne's best value suburbs by liveability points per million dollars of house price. Only one of that top 20 clears the $494,000 line: Melton South, which tops both lists. The rest, from Broadmeadows at $575,000 to Dandenong at $705,000, need a household income of roughly $145,000 to $180,000 under the same assumptions. Good value in Melbourne, in other words, starts a little above the median income.

On units the two analyses agree completely. All fifteen of the value ranking's unit picks sit under $494,000, and five of them, Travancore, Kingsville, Carlton, Flemington and Brunswick West, also make the national top 15 above. Two independent rankings landing on the same suburbs is the strongest signal we can offer: inner-Melbourne units are the best amenity a median income buys anywhere in the country, on our data.

What the data shows

Stripped back, the suburb-level picture is this. On a $125,000 income and a 20% deposit, the median house is within reach in about one regional suburb in six across NSW and Victoria, in two suburbs on Melbourne's fringe, and nowhere in Sydney or metropolitan Adelaide. The suburbs that qualify are, on median, 259 kilometres from a capital, with liveability, safety and school scores well below the suburbs that do not. Units restore a genuine choice in Melbourne and a narrow one in western Sydney, and the best of those units score as well on amenity as anything in the country. At $76,000, houses are effectively confined to seven country towns and units to one suburb in Melbourne's west. Those are the numbers; what to do about them is a question for others.

Methodology

Borrowing capacity follows the realestate.com.au Housing Affordability Report 2026 (Angus Moore and Luc Redman, 5 September 2026): 30% of gross household income on repayments, assessed at the June 2026 average new variable owner-occupier rate of 6.3% plus a 2.5 percentage point buffer, over a 30-year principal-and-interest loan with a 20% deposit. That yields a maximum loan of about $395,000 and a purchase price of about $494,000 at $125,000, and about $240,000 and $300,500 at $76,000. Purchase costs such as stamp duty are ignored, which makes our line slightly generous. Prices are our current stabilised trailing medians from state Valuer-General sales data, guarded to suburbs with at least five recent sales; the candidate set is suburbs with at least 2,000 residents, excluding commercial hubs. Coverage is NSW, Victoria and metropolitan SA (houses only in SA). Scores are explained on the methodology page. The report's own affordability share is a share of individual sales across the full income distribution; ours is a count of suburbs by their median, so the two percentages are not interchangeable. None of this is financial advice. Borrowing capacity depends on your lender, your debts and your circumstances.

Read next: The Rent Gap asks the same question of renters: can the typical earner afford the typical rent in their own suburb? Best Value Suburbs in Melbourne 2026 ranks the city by liveability per dollar, and Best Suburbs to Live in Melbourne 2026 shows what the no-budget list looks like. For where the incomes that can afford the rest of the map come from, see Where Australia's Top Earners Really Live.