Careful what you wish for

The only way Australia’s housing can become affordable is for prices to drop, by a lot in some places, says respected real estate researcher Michael Matusik.

While he argues that an accepted affordability benchmark sees dwelling prices as sustainable at three to four times household income, he has made some adjustments to produce the table below.

For Sydney and Melbourne, which are “a bit special”, he allows six times earnings and for “the wannabes” (southeast Queensland, Canberra and Perth) he allows five times the benchmark.