The thing is, you can only borrow what you can repay.
As lenders' rules, the banks can only lend to up to 36% of your gross income and average income is around 50 to 70k/year.
That said , something like $2000/month repayment is most average workers can afford, with this amount of repayment, average loan would be around 300 to 400k, base on this, most would probably can afford to buy something costs less than 450-480k the most (with their initial 10-20% deposit).
The problem in Sydney is that not many properties are selling at this price range unless it is a small unit in some very rough housing commission enclave areas. Houses in those rough areas are close to a million though.
This can conclude that Sydney properties are at least 40-50% over-valued. In some good decent areas, are 100% over-valued.
Yes, the entire working class on average income has been pushed out in owning their basic right -that is, a place to call home.
