Perth takes the cake in affordability, but for how long?

Annalise HuntThe West Australian
Camera IconKalgoorlie-Boulder. Credit: Photon-Photos/Getty Images/iStockphoto.

Western Australia remains the most affordable state for housing in Australia, with only the two territories labelled more affordable.

REIWA President Damian Collins said Real Estate Institute of Australia’s latest Housing Affordability Report showed Perth had the lowest median sale price in the country.

“Even though we expect house prices to rise a further 10 per cent next year, we are still a long way off our peak prices back in 2014-15 and will still have medians well below $1 million, unlike Sydney and Melbourne,” he said.

The median sale price for Perth in the latest quarter was $520,000 for homes – Sydney more than doubled this with an average sale price of about $1.5 million.

“Interestingly, based on current median house prices across the country, if Perth’s median house sale price lifts back to $545,000 it would still have the lowest median house price of any capital city in the country,” Mr Collins said.

The weekly rent average for dwellings in Perth is $420, while Canberra is the most expensive city to rent with a median weekly rental price of $590.

According to Mr Collins, the Housing Affordability Report determines affordability based on what proportion of the median weekly family income is required to service loan repayments and pay rent in the respective state or territory.

“During the September 2021 quarter, WA was the only state to record an improvement in housing affordability,” he said.

November 2021 REIWA statistics detailed the most affordable suburbs in Perth and regional towns that had 28 or more sales in the 12 months prior.

The most affordable Perth suburbs included Medina, Armadale, Camillo, Orelia, Parmelia, Greenfields and Mandurah.

Regionally, the cheapest towns to buy in were Kalgoorlie-Boulder, Geraldton, Bunbury and Esperance, with median prices under $400,000.

Mark Hay Realty Group Principal Mark Hay believes price rises will affect affordability in 2022 and interest rates will also creep up.

“A lot of first homebuyer activity in the market was induced through the COVID-19 bonus and incentive programs given by the State Government, and this will slow down in the next couple of years,” he said. “The foreseeable future will continue to show that our historically low-priced market for the last 10 years is grossly undervalued.”

Mr Hay said with borders set to open on February 5 to international and interstate arrivals, more pressure would be placed on property prices in WA.

“Our company itself has sold a dozen properties in the last six months to either overseas or eastern states purchasers, and they have been purchased sight unseen or through a three-dimensional Matterport or video presentation of the property,” he said. “Their intention is to move to WA at some stage.

“I believe when the borders open our housing affordability will be compressed again because the market will move up, with eastern states and overseas buyers waking up to purchasing the great value and inverse yields Perth frequently has.”

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