Joondalup
(08) 9300 2283
Unit 4, 80 Grand Boulevard
Joondalup WA 6027

Perth Home Affordability Best in Years

29 August 2013

Perth property is more affordable than it has been at any time in the past decade, the Housing Industry Association says.

The HIA said rising wages and falling interest rates have helped offset increasing house prices, making properties as affordable now as they were 10 years ago when they cost about half as much.

The association's affordability index for Perth property is at 69.1 per cent - the best since December 2003 when it was 70 per cent.

It may be surprising given the median price for a WA dwelling is $575,000, more than twice the December 2003 median cost of about $271,000.

HIA chief economist Harley Dale said interest rate cuts helped offset the higher house costs, with a fall from 6.8 per cent on variable loans a decade ago to 5.35 per cent in the last quarter.

The rate changes have had a favourable impact on mortgage payments, which average $3128 a month compared with $1441 a decade ago. Mr Dale said homeowners were better able to service bigger mortgages because WA's average weekly wage was $1662, compared with $926 a decade ago.

The HIA research shows the most unaffordable time in the past decade was early in the boom year of 2007, when the index hit a low of 41.1 per cent.

However, Perth was still very costly compared with all other capital cities except Sydney.

The most affordable State was Tasmania, with an index of 88.4, followed by Brisbane on 84.8 per cent.

Mr Dale credited WA's improvement to the increased supply of new homes. In the year to March, almost 22,000 new homes were built in the State compared with as few as 18,000 in previous years.

Urban Development Institute of Australia WA figures showed the stock of vacant land had fallen to its lowest in seven years, after a bout of higher buyer demand.

A UDIA survey of major land developers showed stock on the market fell 24.7 per cent in the three months to June 30 and 45 per cent over the past year. << back to news articles