Are there any alternatives to living in Sydney?

Sydney is very expensive with median house price of $914,000 after posting 16.0 per cent annual growth according to Domain Group data for the March quarter.  The average earnings for Sydney is $57,189.60 according for ABS.

Median House Prices:
http://www.propertyobserver.com.au/forward-planning/investment-strategy/market-trends/42324-
sydney-s-median-house-price-passes-900-000-domain-group.html

Average weekly earning:
http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6302.0Nov%202014?OpenDocument
NSW (Nov 2014): $58,775.60
QLD (Nov 2014): $57,189.60

On average Sydney earnings you get $3909.97 each month after tax:

Now lets say the average couple want to buy an average Sydney house and they need to borrow $700,000, then they need to make repayments of $3,737 each month for the next 30 years...that means they will need to earn $1,345,320 after tax and after living expenses, of course this assumes that interest rates will not rise to their previous historical much higher levels and both of them can maintain full employment:

So what is the average first home buyer meant to do that aspire to own a house?

Choice A: Stay in Sydney
Work hard to save a 20% deposit and by the time deposit has been saved Sydney prices are 20%+ higher than previously as Sydney house prices are rising far faster than inflation or salaries. Then when the couple finally have enough money for a deposit they take on a huge mortgage that literally takes a lifetime to repay and during this time struggle financially. 

Choice B: Move to a more affordable location
Stay in Sydney for a few years to save the same as a 20% deposit for a Sydney property, but then rather than buying in Sydney move to a more affordable location. Buy a house at much lower cost than Sydney and be almost debt free and have far better life style. Have long term security as they own their own home.  No longer necessary for both partners to be forced to work for next 30 years to repay mortgage. Can still get jobs outside capital cities and with high speed internet can perform many jobs remotely, furthermore without debt can seek out alternate business opportunities such as running online business.

Below is a hypothetical scenario of a Rockhampton house for $245,000 on 1,113 square meters of land, but many other alternatives exist in Australia:

http://www.domain.com.au/property/for-sale/house/qld/berserker/?adid=2011867738

People will argue that this is impossible, yet they are willing to struggle financially for 30 years and be "working families" where both partners have to work and children go to child care and before/after school care and spend huge amount of money on child care. They spend huge amounts of time commuting in city traffic yet they never even consider the alternatives. Everyone is different, yet moving out of Sydney should be considered and as it may offer a far better life style and opportunities in investing "free" money that would otherwise have gone to the banks repaying huge mortgages.

Rockhamton average earnings $51,778.40 (based on 2011 data):
http://stat.abs.gov.au/itt/r.jsp?RegionSummary&region=36360&dataset=ABS_NRP9_LGA&geoconcept=REGION&datasetASGS=ABS_NRP9_ASGS&datasetLGA=ABS_NRP9_LGA&regionLGA=REGION&regionASGS=REGION

Unemployment rate in Rockhampton 2% higher than Sydney:  

Can get good internet access in Rockhampton, perfect for working remotely or running an online business :
http://www.adsl2exchanges.com.au/
https://www.finder.com.au/nbn-tracker/map?address=Rockhampton%20City%20QLD%204700,%20Australia

Rockhampton's best suburbs:

Virgin an Qantas fly to Rockhampton, one way discount fares:
- Brisbane $109
- Sydney $199 (stopover in Brisbane)

Here is a locals view:
Great little city with everything that you need - there's plenty of restaurants and cafes, a decent sized shopping centre and other smaller ones, a cinema, pools and big playgrounds and gardens and a small zoo. it only takes about 15 mins to get anywhere so that will be a good change for you but the amount of traffic lights is pretty ridiculous. There are 3 hospitals in town. There is a north side and south side separated by the Fitzroy River and two bridges. The northside (good areas are norman gardens, frenchville, kawana) which has a lot of newer homes but southside (good areas are Allenstown and the range) has some beautiful old Queensland homes that have been renovated. There are heaps of schools both public and private and it depends on where you live really but I've heard good things about most of them. The beach (Yeppoon and there are other smaller beach communities surrounding it) is only 20 mins away and a lot of people choose to live there and drive into rocky for work so that could be an option for you. But Yeppoon lacks facilities and is in need of a facelift. There are some beautiful homes there though. 

Update 26/10/2019 - more affordable locations including Townsville:

There are so many places around the world that have affordable housing, it just happens that Sydney is very expensive. For a global comparison of house prices see: http://www.demographia.com/dhi.pdf

Location, Median Multiple, Median Price, Median Household Income:

• Australia Adelaide, SA 6.9 $470,000 $68,100
• Australia Albury-Wodonga, NSW-VIC 4.9 $330,000 $67,700
• Australia Alice Springs, NT 4.4 $470,000 $105,900
• Australia Ballarat, VIC 5.6 $362,000 $64,600
• Australia Bendigo, VIC 5.3 $340,000 $64,700 268
• Australia Brisbane, QLD 6.3 $530,000 $84,000
• Australia Bundaberg, QLD 5.4 $290,000 $53,400
• Australia Cairns, QLD 5.6 $405,000 $72,000
• Australia Canberra, ACT 5.7 $635,000 $112,200
• Australia Darwin, NT 4.2 $500,000 $119,000
• Australia Fraser Coast, QLD 6.6 $320,000 $48,700
• Australia Geelong, VIC 7.7 $552,000 $71,800
• Australia Gladstone, QLD 2.9 $260,000 $90,900
• Australia Gold Coast, QLD 8.4 $630,000 $75,300
• Australia Hobart, TAS 6.8 $475,000 $70,000
• Australia Mackay, QLD 4.3 $335,000 $77,900
• Australia Melbourne, VIC 9.7 $835,000 $86,000
• Australia Perth, WA 5.7 $490,000 $85,400
• Australia Rockhampton, QLD 3.8 $265,000 $70,500
• Australia Sunshine Coast, QLD 8.7 $595,000 $68,100
• Australia Sydney, NSW 11.7 $1,100,000 $94,400
• Australia Toowoomba, QLD 5.1 $355,000 $70,200
• Australia Townsville, QLD 4.2 $325,000 $77,600

There are many places in Australia that are still affordable. A young person could potentially work in Sydney for a few years and save then move to a more affordable location and have no mortgage. Here is an example below of houses in Townsville below $250k: https://www.realestate.com.au/buy/property-house-between-0-250000-in-townsville/list-1?source=refinement

With no mortgage even a $50K/year job is sufficient to sustain a family and have a relaxed life. Or even better run an online business from home. Many families moved continents away from famility and friends for a better quality of life, so moving to a different location within Australia is minor in comparison.

What is really needed for good quality of life? That is really dependant from person to person...but according to Maslow's Hierarchy of Needs the most basic needs are food, water, sleep, clothes, shelter followed by personal security and safety. Even a town like Townsville has all of these basic ementies including several hospitals, schools, two universities, affordable housing, airport, shopping centers, cinemas, museums, beaches, high speed internet with NBN. The basic needs can be met outside of Sydney.

With no mortgage people can choose what type of employment they want and yes withTownsville's unemployment rate of 7% it has higher unemployment rate than Sydney but there are jobs there and I would argue that someone in Townsville with a $50,000 job and no mortgage would have more disposable income and a better quality of life than someone in Sydney with $80,000 job and big mortgage and commuting 2 hours each day.

Yes, it is a massive change but for some people it can be a genuine alternative.