Interest rates are starting to bite, with housing affordability declining across the country according to the REIA Housing Affordability Report for the December 2022 quarter.
Interest rates are starting to bite, with housing affordability declining across the country according to the REIA Housing Affordability Report for the December 2022 quarter.
Despite this, WA remains one of the most affordable places to buy a home, REIWA CEO Cath Hart said.
“Buying a home in WA is still very achievable,” she said.
“Our median house price is significantly lower than many other States, which means a lower deposit, lower mortgage and lower interest rate impact, while our higher-than-average wages support home owners’ ability to service a loan and adjust to rate rises.”
In WA the proportion of median family income* needed to make loan repayments** rose 2.3 percentage points to 33.8 per cent in the December 2022 quarter. This is up from 31.5 per cent in the September quarter and 25.3 per cent in the December 2021 quarter.
Only the Northern Territory was more affordable, with home owners there needing 32.2 per cent of their income to meet loan repayments.
Once again New South Wales mortgage holders fared the worst. They required a massive 54.8 per cent of their median weekly income to meet their mortgage commitments.
This will have increased further as there have been two interest rate rises since then.
Source: REIA
Ms Hart said buyers could still find well-priced homes in Perth, with 26 suburbs having a median house price below $400,000.
“A quick search of reiwa.com found nearly 1,200 residences priced at $400,000 or less which includes modern apartments, older apartments closer to the CBD, older homes on larger blocks, new homes on smaller blocks, villas, homes with pools and properties near the beach or in the heart of popular suburbs,” she said.
Perth’s Top 10 most affordable suburbs
Suburb |
Annual Sales |
Annual Median Price |
Armadale |
353 |
$310,000 |
Medina |
75 |
$312,500 |
Camillo |
107 |
$335,000 |
Mandurah |
210 |
$345,000 |
Calista |
33 |
$349,000 |
Brookdale |
57 |
$350,000 |
Parmelia |
134 |
$350,000 |
Coodanup |
93 |
$351,500 |
Orelia |
81 |
$360,000 |
Midland |
103 |
$365,000 |
Midvale |
32 |
$365,000 |
© REIWA RESEARCH
Based on suburbs with 27 or more sales in the year to February 2023, subject to revision.
Data sources: www.reiwa.com.au; Landgate
Loan activity
The number of home loans in WA declined slightly over the quarter, down to 10,535 from 10,701 in the September quarter.
Ms Hart said this was likely a reflection of the usual decline in sales activity over the festive season.
First home buyer loans also decreased over the quarter, down 4.8 per cent to 3,802, which is 28.8 per cent lower than a year ago.
They made up 36.1 per cent of WA’s owner occupier market.
Rental affordability
There was a glimmer of hope for tenants in a number of States, with rental affordability improving.
It decreased marginally in WA however, with the proportion of income required to meet median rent payments rising 0.6 percentage points to 20.4 per cent in the December 2022 quarter. This is an increase of 1.3 percentage points from the same time in 2021.
Ms Hart said despite the increase, WA was the second most affordable place for tenants.
"There is not a shortage of affordable areas for tenants,” she said.
"Six in 10 Perth suburbs with rentals have a median weekly rent of less than $550, and many are well below this.
"There is a shortage of available homes though, and that is one of the main problems facing the market at this point.”
Tenants in Tasmania were the hardest hit, requiring 28.7 per cent of their family income to meet rent payments, however this is down from the 30.1 per cent recorded for the September quarter.
Source: REIA
Perth’s top 10 cheapest suburbs for rent
Suburb |
No. of leases Dec-Feb 2023 |
Median Rent Price Dec-Feb 2023 |
Armadale |
72 |
$400 |
Mandurah |
53 |
$400 |
Parmelia |
22 |
$435 |
Orelia |
18 |
$420 |
Midland |
59 |
$400 |
Maylands |
130 |
$400 |
Osborne Park |
36 |
$405 |
Kelmscott |
26 |
$415 |
Mosman Park |
54 |
$420 |
Kenwick |
16 |
$465 |
Leda |
14 |
$465 |