State remains affordable for buyers and renters
Housing affordability is declining across Australia as interest rates climb. Despite this, Western Australia remains one of the most affordable places to buy a home, according to a report by the Real Estate Institute of Western Australia.
In WA, the proportion of median family income needed to make loan repayments rose 2.3 percentage points to 33.8% in the December quarter. That’s up from 31.5% in the September quarter and 25.3% in the December 2021 quarter.
Only the Northern Territory was more affordable, with the average homeowner needing 32.2% of their income to meet loan repayments.
New South Wales was once again the least affordable for homeowners, with mortgage holders spending an average of 54.8% of their weekly income to meet repayments. This number will be even higher now, with two rate rises since the December quarter.
Proportion of family income needed to meet mortgage repayments
|
|
Dec. qtr 2022 |
Sept. qtr 2022 |
Dec. qtr 2021 |
|---|---|---|---|
|
NSW |
54.8% |
51.7% |
44.4% |
|
VIC |
45.8% |
43.8% |
36.7% |
|
QLD |
40.7% |
38.7% |
31.4% |
|
SA |
39.8% |
36.9% |
28.8% |
|
WA |
33.8% |
31.5% |
25.3% |
|
TAS |
43% |
40.3% |
31.9% |
|
NT |
32.2% |
31.1% |
24.8% |
|
ACT |
34.7% |
31.7% |
26.5% |
|
National |
44.7% |
42.3% |
35.4% |
Source: REIWA
Loan activity
The number of home loans in WA inched down over the quarter, down to 10,535 from 10,701 in the September quarter. The drop likely reflected the usual decline in sales activity over the festive season, REIWA said.
Read next: Australian home values – what’s the state of the market?
First-home buyer loans were also down, dropping 4.8% to 3,802, which is 28.8% lower than the year prior. First-home buyers made up 36.1% of WA’s owner-occupier market.
Rental affordability
Beleaguered tenants saw a small ray of hope in the quarter, with rental affordability improving in a number of states, REIWA reported.
However, rental affordability was down slightly in WA, with the proportion of income required to meet median rent payments rising 0.6 percentage points to 20.4% in the December quarter. That’s up 1.3 percentage points from the same time in 2021.
Despite the increase, WA was the second most affordable state for renters, behind Victoria.
Tasmania saw the worst affordability, with the average renters paying 28.7% of their family income to meet rent payments. However, that’s down from 30.1% in the September quarter.
Proportion of family income needed to meet rent payments
|
|
Dec. qtr 2022 |
Sept. qtr 2022 |
Dec. qtr 2021 |
|---|---|---|---|
|
NSW |
25.7% |
26.1% |
24.9% |
|
VIC |
19.4% |
19.6% |
19.4% |
|
QLD |
23.1% |
23.2% |
20.5% |
|
SA |
23% |
22.8% |
21.9% |
|
WA |
20.4% |
19.8% |
19.1% |
|
TAS |
28.7% |
30.1% |
28.7% |
|
NT |
25.6% |
25.9% |
25.4% |
|
ACT |
21.1% |
21.6% |
21.1% |
|
National |
22.9% |
23% |
22% |
Source: REIWA
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