House prices may have risen by approximately 14 per cent in Perth this year, but Western Australia is still the most affordable state in the country for housing, according to the Real Estate Institute of Australias latest Housing Affordability Report.
The 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.
Residential sales market
Housing affordability improved in Western Australia during the September 2021 quarter, with the proportion of family income required to servicing average loan repayments reducing by 0.1 per cent to 26.3 per cent.
WA was the most affordablestate in the country (only the Northern Territory and Australian Capital Territory were more affordable) and was the only state to record an improvement in housing affordability during the quarter, with every other state recording declines.
The Northern Territory recorded no change in affordability, while the Australian Capital Territory also saw a 0.1 per cent improvement.
New South Wales required the largest proportion of family income to service loan repayments during the quarterat 44.7 per cent.
The total number of loans taken out in WA during the September quarter decreased by 6.7 per cent, however on an annual basis, loans are up 30.2 per cent.
The average loan size increased to $435,456, which is 1.1per cent higher than the June 2021 quarter and 9.8 per cent higher than the September 2020 quarter.
First home buyers
In a testament to how affordable our local market is, WA once again had the largest percentage of first home buyers in its owner-occupier market at 42.4 per cent.
Of the total number of first home buyers who purchased during the September 2021quarter, 14.7 per cent were from WA.
It was more affordable for first home buyers to purchase a home in WA during the September 2021 quarter than the June 2021 quarter, with the report showing that the average loan taken out by first home buyersreduced 0.6 per cent to $365,815.
Rental market
In the rental market, although affordability in WA experienced a small 0.2 per cent decline, the report showed that WA and Victoria were the most affordable places in the country to rent in, with both requiring 19.8 per cent of the average income amountto pay their rent.
To put that figure into perspective, in Tasmania, the proportion of income required to pay rent was 29.7 per cent.
