Western Australia has recorded its smallest drop in housing and rental affordability in 12 months, according to the latest Real Estate Institute of Australia (REIA) Housing Affordability Report.
Housing and rental affordability each fell by just 0.2 percentage points during the September 2024 quarter, a marked improvement compared to previous quarters.
REIWA CEO Cath Hart (pictured above) pointed to several factors that contributed to the slower decline in affordability.
“WA recorded an increase in median weekly income over the quarter and this has helped offset increases to loan size and rent payments,” Hart said.
She added that the slowing rate of house price growth helped ease pressure on affordability, with mortgage increases limited to 1.2% for the quarter. Meanwhile, rent prices showed periods of stability, further slowing the decline.
In WA, the proportion of family income needed for monthly loan repayments rose slightly to 39.8% in the September quarter. This was based on a median weekly family income of $2,646 and average monthly loan repayments of $4,566.
Despite the small increase, WA remains the most affordable state for homeowners, after the ACT (34.7%) and Northern Territory (31.6%).
By contrast, New South Wales continued to be the least affordable, with families allocating 58.1% of income to mortgage repayments, REIWA reported.
Loan activity in WA showed varied trends during the September quarter.
First-home buyers were less active, with loans falling 10.2% for the quarter to 3,713, though still 1.8% higher annually.
“Despite rising prices, WA is one of the most affordable states for first home buyers,” Hart said, noting that only the Northern Territory and Tasmania offered more affordability.
Rental affordability in WA also saw only a small decline, with families needing 23.8% of their income for rent payments. This represents a significant improvement compared to larger drops earlier in the year.
Hart highlighted easing conditions in Perth’s rental market as a key factor.
“The pressure in the Perth rental market has been easing over 2024,” she said. “We’ve seen new supply come to the market, which has seen the vacancy rate increase and rent prices record periods of stability.”
Nationally, WA ranks in the middle for rental affordability. The ACT (19.1%), Victoria (21.8%), and Queensland (22.9%) were more affordable, while New South Wales remained the least affordable, requiring 28.8% of family income for rent.
With signs of easing market pressures and stable income growth, WA’s housing and rental affordability continues to hold its competitive edge against other states.
Compare the latest data with figures from the June quarter.
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