WA the most affordable State to live in, but levels are still at record lows, according to new data

Housing affordability in regional WA is defying the national trend with conditions worsening at a slower rate than the rest of Australia, according to latest analysis. The PropTrack Housing Affordability index by REA Group has found that housing affordability in WA has not hit the lows of other States with regional housing affordability having the slowest decline overall. The report attributed the slow regional decline to in part having come off a higher base created during the mining boom of the late 2000s and early 2010s which saw WA become the most affordable State in Australia between 2006-2010. Home prices have slowly grown in WA compared with the rest of the country: home prices in Perth are up just 24 per cent since 2010, and up by only 8 per cent in regional WA, compared with 93 per cent nationally. This figure is also helped by the fact that on average WA incomes are the highest across all States and wage growth has outpaced home prices over recent decades. Houses in Bunbury are recognised as the fastest-selling in the nation, on average staying on the market for less than a month, highlighting the demand for housing in the region. These levels make affordability the worst it has been in recent decades, with the time it takes to save for a deposit still well-above the levels experience in 1980s. PropTrack senior economist and report co-author Angus Moore said the boosted wage growth needed to be reflected in housing prices as well so people could make ends meet. “Household incomes have risen since the pandemic and improved labour market conditions have drawn more people into employment and boosted wage growth,” he said. “However, this has been insufficient to offset higher home prices and, critically, the surge in mortgage rates”. Details of how dire the housing crisis is shows the average household would need to save 20 per cent of their income for more than 5½ years to save a 20 per cent deposit on a median-priced home. Low and middle-income households are doing it the hardest, with households earning $64,000 a year able to afford only 3 per cent of homes. Mr Moore said those at the bottom at the economic spectrum were doing it the hardest. “Surging home prices throughout the pandemic and rapidly rising interest rates over the past year have brought housing affordability to its worst level in at least three decades,” he said. “The situation is especially challenging for lower-income households and first-homebuyers.” While affordability has decreased across the board for all households, it’s incredibly stretched for 25-34 year-olds, who can afford fewer than 30 per cent of homes.