How to successfully buy property as a single person

Australia's housing market has a type - and they're not single.  If you're buying alone, the system treats you as a financial anomaly.

This is not down to your lifestyle choices, but because you're missing the magic formula: a second income.

In a market built for couples, solo buyers are left out in the cold.

Singles are priced out of the market

According to CoreLogic data analysed by Compare the Market, singles on average salaries are priced out of 99.08% of 2163 capital city suburbs across Australia.

Their only options lie on the fringes of the cities, with most affordable suburbs being in Greater Darwin - Bakewell, Driver, Gray, Millner, Rosebery - or in Orelia, 36km south of Perth.

Couples, on the other hand, can afford 20.85% of capital city suburbs - 165 in Brisbane, 126 in Sydney, 240 in Melbourne, 101 in Adelaide, 32 in Hobart, 177 in Perth and all 42 suburbs assessed in Darwin.

According to Compare the Market property expert Andrew Winter, staggering value growth has left hopeful buyers on average wages in the dust.

"Wage growth has not kept pace with property prices over the past five years," says Winter.

"People on average salaries are no longer able to afford in our capitals without coupling up with a loved one, trusted friend or family member."

To the solo home buyer, the Australian dream feels like a two-player game. That 4x2 on a corner block isn't meant for them.

They should be so lucky to rent a room and share a water closet.

Designed for dual incomes

Couples have a clear advantage: shared incomes, split expenses and greater borrowing power.

And while that may seem obvious - after all, two incomes are better than one - the system is designed to reward dual-income households and penalise singles.

Take a single person earning $200,000 a year versus a couple earning $100,000 each.

Andrew Tauriello, mortgage broker at Lending Hub Co, says that 90% of the time the couple will be able to borrow more.

"Tax brackets come into play a lot," he says. "If a couple earns $200,000, how it's split matters. Two partners earning $100,000 each pay less tax than if one earns $200,000 and the other nothing. The higher earner gets pushed into a higher tax bracket."

"If you break down the numbers, that's one key difference, where single buyers do get penalised even if their total income matches a couple's."

Why the household expenditure measure matters

There's also the household expenditure measure (HEM) - the benchmark lenders use to estimate minimum living costs. While it 
varies slightly between banks, Tauriello says it's broadly consistent.

"Before the Royal Commission, people would say their expenses were $1000 a month when the figure might have been $3000. There were minimal checks. Now, thanks to the HEM benchmark, lenders use a standardised baseline based on your income and household type."

While designed to promote fairness, the HEM often works against singles by overestimating what they spend.

"I've had clients living with their parents, barely spending anything - no groceries, no car - maybe $800 a month. But if the HEM says $1600, that's what the bank uses. You can't challenge it."

Then there's the baked-in economic truth: two people living together don't have double the expenses of one.

Lenders account for this. A couple's HEM might only be 1.5 to 1.7 times higher than a single's.

"Couples can split costs such as rent, groceries, and bills," says Tauriello. "Singles cover all that on their own."

Singles also get stung on health and life insurance - both in premiums and how lenders treat them.

Unlike bills or groceries, which are factored into HEM, insurance is a non-HEM expense, assessed on top of your budget. That reduces borrowing power.

This makes it especially tough for single parents who often pay 60%-70% more to cover their children than couples do, according to an investigation by the consumer advocate CHOICE. In some cases, they're charged the same premium as two-parent families.

"If health insurers are happy to insure a child for free for a couple, they should be willing to do the same for a single parent," says CHOICE's Mark Blades.

So not only do singles pay more, they're assessed as less creditworthy because of it.

How affordability is determined 

• Start with the median  property price in a suburb.
• Subtract a 20% deposit.
• Calculate repayments on the remaining loan using an interest rate of 5.97%.
• Compare the repayment figure to the average salary in each State.
• If repayments exceed 30% of income, the property is considered unaffordable - the standard rule of thumb for 'comfortable' mortgage servicing.

Busting the deposit myth 

With the odds stacked against them, what's a single home buyer to do?

As any property mogul using business earnings to leverage an empire will tell you: just cut out the $5 coffees and save.

But even if you gave up every avo smash, it still takes about 5.6 years to save a 20% deposit in 2024, according to PropTrack - a 14% increase from a decade ago.

In 2014, the median house price was $474,500, meaning a 20% deposit was $94,900. By 2024, that median had surged to $868,000, requiring a $173,600 deposit. If that trend continues, by 2030 the median home could hit $1.2 million - with a deposit of $240,000.

Even then, Compare the Market's Winter says it's not just about the deposit; it's the monthly repayments that strain most new homeowners.

"On top of that, they're often paying for home and contents cover, council rates and repairs for the first time, reducing their typical budget by thousands of dollars over the year."

After all that, it may seem as if single home buyers have no hope unless it comes from money, luck or timing (rich parents, an inheritance or a home bought when prices still resembled reality). Because, according to Compare the Market's analysis, less than 1% of city suburbs are affordable for singles on average wages. But what's 'affordable'?

First, do you really need a 20% deposit? Absolutely not, says Tauriello.

"That's outdated."

Very few first-home buyers save 20%, and those who do often have help from parents. Most of his clients enter the market with deposits of 5%-12%, thanks to low-deposit schemes and waived lenders mortgage insurance (LMI).

While LMI is often seen as a penalty, Tauriello sees it differently.

"It's a tax on time," he says. "You can't wait years to go from 10% to 20%. In that time, prices go up and you're locked out."

For most buyers, he says, 12% is the 'sweet spot' - high enough to get a loan, low enough 
to move before the market does.

What the median means

The affordability model also assumes buyers aim for the median price in each suburb. But that can be misleading.

While more useful than the average, the median is just the middle point. Half of all properties sell below it. It can shift based on what's selling, not actual market movement (see table, below). Same homes. Same prices. Lower median. That doesn't reflect value dropping, it reflects which homes sold.

It also says nothing about property type. Maybe the dream home is out of reach, but what about a 2x1 villa or solid unit in the 
same postcode?

"Are you a median buyer?" says Tauriello. "Should a single first-time buyer aim for the middle? Probably not. They're more likely in the lower third."

Repayments also don't exist in a vacuum. "Your loan repayment is based on three things: loan size, interest rate and loan term," says Tauriello.

"A 5.97% rate is fine for modelling, but it's just one scenario."

Mortgage brokers can compare rates across the market and tailor options to your circumstances. A lower interest rate can make a big difference - and some buyers may qualify for special products or introductory offers that change the numbers entirely.

What can solo buyers do?

When you don't have a second income to lean on, you need to get creative.

Co-buying under the First Home Guarantee Scheme is one option. Recent changes allow two people -  even if they're not spouses - to buy together with just a 5% deposit and no LMI.

Friends or siblings can now team up, as long as both are first-home buyers.

It's a big shift, and one that Tauriello says reflects growing awareness of how tough it is to do it alone.

"A lot of people realise they can't get what they want on their own, but they're happy to buy with someone they trust," he says.

Still, co-ownership comes with risks. Tauriello says you'll need a formal agreement. What happens if one party wants to sell? Or their situation changes? Even with siblings, it's important to get everything in writing.

"My job is to help people weigh up not just what's possible today, but what happens in three, five, 10 years," he says.

Another approach is rentvesting: rent where you want to live and buy where you can afford.

"It's about building equity where you can," says Tauriello. "One of my clients bought in Brisbane; couldn't afford Sydney. The property's gone up $100,000 in a year. He would never have saved that."

That equity can then be used to 'leapfrog' back into the market, using the profit to buy closer to where you want to live.

"It's not for everyone, not all buyers want to be landlords, but it can be a smart stepping stone for buyers who are priced out of their own postcode."

More people are stepping outside their comfort zones and changing postcodes altogether. According to Tauriello, more buyers are now willing to cast the net wider - whether that's a smaller capital or regional centre with solid infrastructure and employment prospects.

"Entry level in Sydney is now around $800,000," he says. "In Melbourne, you can still get in for $500,000, 40 minutes from the CBD. Same with Brisbane."

A shift in mindset 

For those who are single and unwilling (or unable) to co-mingle, the prospect of owning a home is bleak. The system still favours couples. It rewards scale and penalises independence.

The national conversation around affordability paints in broad strokes, often missing the nuance of individual situations, whether it's HEM, deposits or median prices.

And yet, many of the structural disadvantages facing singles aren't insurmountable. They just require different thinking.

The Australian dream might still be a freestanding 4x2 on a corner block, but maybe for now it's a two-bedder with good bones, a place you share with someone you trust or a foot on the ladder in a postcode you've never visited.

The game isn't unwinnable, even if you go it alone.

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