Perth Housing Affordability Continues to Decline

If you’re a Perth resident, you’ll know housing and rental affordability is only getting worse, but now it’s official according to a new report.

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The Real Estate Institute of Australia’s Housing Affordability Report shows the percentage of family income needed to service a  home loan in Western Australia increased by 1% during the March quarter and by 3.6% over the year.

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This means the average household in WA will spend about 37.8% of their income on home loan repayments.

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This calculation is based on a median weekly family income of $2,612 and an average monthly loan repayment of $4,277.

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Despite the decline in affordability, WA remains one of the most affordable states in the country for homeowners with only the ACT (34.3% of family income) and the Northern Territory (33.2% of family income)  more affordable..

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Rental Affordability also Declines

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Rental affordability in WA also declined during the same period. 

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The proportion of family income required to meet WA’s median rent payments now stands at 23%, which is a 0.6% increase in the 3 months to March and a 2.3% increase over the year. 

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REIWA CEO Cath Hart noted that median rents in WA are expected to continue to increase over 2024, further impacting affordability. 

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However, she anticipates a slowing rate of growth in rents due to changing market conditions. Additionally, legislation limiting rent increases to once a year will come into effect in the coming months, offering some relief to renters.

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Perth Rental Market Starts to Change

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Rent Choice General Manager Clare Christiansen said she didn’t expect to see any reprieve in the short term for tenants in the more affordable price brackets but the top end of the market was showing signs of softening.

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“Rentals properties in the more affordable price brackets are still receiving a high volume of applications, however at the top end of the market demand is still quite buoyant but it is starting to ease,” Clare said.

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“We expect prices in the low-to-mid price brackets to remain firm, but those higher-end properties may experience some easing in price.”

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“Property investors should be aware of these changing dynamics to help ensure they price their rentals appropriately to maximise their rental returns and minimise their vacancies periods.”

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Source:

Housing Affordability Western Australia, experiences minor decline: REIWA. https://eliteagent.com/housing-affordability-western-australia-declines/

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