WA continues reign as cheapest state
The state has remained Australia’s most affordable state despite a measurable increase in the portion of income required to meet loan repayments and rental payments alike, the Real Estate Institute of Australia (REIA) has confirmed.
According to the latest REIA Housing Affordability Report, Western Australia has maintained its status as the most affordable state despite a slight 2.2 per cent decline in housing affordability over the December 2023 quarter. Western Australian home owners now require 26.7 per cent of their family income to meet loan repayments.
This analysis of affordability is based on a median weekly family income of $2,590 and an average monthly loan repayment of $4,123. In contrast, the national median income sits at a lower $2,445, while average monthly loan repayments are a more expensive $5,057.
The ACT and Northern Territory continue to be the only markets more affordable than Western Australia, requiring 35.2 per cent and 33 per cent of family income to meet loan repayments, respectively.
Real Estate Institute of Western Australia (REIWA) CEO Cath Hart stated that demand for Western Australian homes remained high throughout the December quarter, fuelled by its booming population growth.
“WA has a growing population that needs to be housed. There is a high demand to buy established homes and they are selling quickly, currently in a median of eight days,” Hart stated.
Despite the speedy sales figures, Hart cited the REIA’s recent findings is a sign that Western Australia home buyers are “well-equipped to navigate the changes”.
“WA currently has the highest median weekly family income, with the exception of the ACT ($3,274),” Hart said.
“This is coupled with one of the lowest average monthly loan repayments, only behind Tasmania and the Northern Territory, [which] puts WA home buyers in a better position to adapt to future changes in market conditions.”
Over the December 2023 quarter, the average loan in Western Australia was $500,649, marking an increase of 5.5 per cent compared to the September quarter. Still, Western Australia’s average loan size remained 18.5 per cent lower than the national average.
Taking a look at rental affordability, REIWA noted that rental affordability has declined over the December quarter, with the portion of family income required to service median Western Australian rental payments increasing 0.9 percentage points to 22.4 per cent.
These results render Western Australia as the third most affordable state for rentals, behind the ACT at 19.2 per cent and Victoria at 21.1 per cent of family income required.
Hart conceded these increases are likely to continue in the coming months as challenges in Western Australia‘s rental market persist.
“Rental supply has been declining while demand has remained strong. These factors are maintaining the pressure on rental prices. Until they ease, we are unlikely to see prices fall,” the CEO expressed.
“We will see a change in the rental market when supply increases. When there is more competition and tenants have more choice, prices will decrease as has happened in the past,” she concluded.