- 53% of surveyed households in WA think housing is affordable
- Proportion of households struggling to pay off mortgage fell to 11% in 2021
- However, those in private rental markets are struggling
As is well known, cities such as Sydney and Melbourne have become less affordable over the past few years.
Domain’s latest First Home Buyers Report found that in order to save for a 20% deposit on an entry-priced home in Sydney, couples will need to save for seven years and one month – an additional 11 months as compared to five years ago.
By comparison, WA remains the most affordable state for houses, according to the Real Estate Institute of Australia’s (REIA) most recent housing affordability report.
The report found that the proportion of family income needed to meet loan repayments in WA during the March 2021 quarter was 24.8%, while the proportion of family income needed to meet rent payments was 18.7%.
Another survey supports these findings.
According to a report published today by the Bankwest Curtin Economics Centre, the last two years have actually seen big improvements in perceptions of affordability. Of the thousands of households surveyed across WA, 53% of them consider their housing as affordable in 2021 – compared to 39% thinking so in 2015.
Perceptions of housing affordability: WA
The report finds that since 2015 there has been an improvement in the proportion of households meeting housing costs, with the proportion “frequently struggling” falling from 24% to 11% in 2021.
However, the results are stark for rentals. The report found that many in private rental markets – particularly single parents – are struggling to make ends meet.
Report co-author and Bankwest Curtin Economics Centre Director Alan Duncan said the divide was likely to increase in the coming months as the full impacts of the lifting of the rental moratorium were realised and pressure continued on an already tight rental market.
“Rents in WA have increased by $60 per week on average since September 2020 because of high rental demand and limited supply of houses available to rent, and are likely to increase further now that the moratorium has lifted.” Professor Duncan said.
However, the report said the rise in rents will not last.
Growth in the number of dwellings approved in WA has risen by 118% over the year to April 2021. As first home buyers are incentivised to enter the housing market (due to a raft of government stimulus measures) and leave the rental market, this should ease rental price pressures.
Dwelling approvals, commencements and completions, 2007-2021
“First home buyers have been the big winners from government assistance, with more than 22,000 new housing loans to first home buyers in WA approved in the 10 months between July 2020 and April 2021 – nearly double the number compared to a year earlier and first home buyers receiving a greater share of new home loans than non-first time buyers for the first time since 2009,” said report co-author, Professor Steven Rowley, Director of the Australian Housing and Urban Research Institute’s Curtin University research centre.
Among the report’s other findings was that Covid had changed what around 20 per cent of households wanted from their housing, including an increased desire for additional indoor and outdoor space and access to amenities.
The full report is called Housing Affordability in WA: A tale of two tenures, and is available online from the Bankwest Curtin Economics Centre.