Own­ing a home at­tain­able

Pilbara News - - Property - Hay­den Groves Hay­den Groves is the pres­i­dent of the Real Es­tate In­sti­tute of WA

Hous­ing af­ford­abil­ity is a sig­nif­i­cant con­cern for a grow­ing num­ber of West Aus­tralians, par­tic­u­larly those on low and very low in­comes, many of them fac­ing the prospect of never be­ing able to af­ford a home of their own.

De­spite this grow­ing is­sue, house prices in WA have be­come more af­ford­able over the past cou­ple of years and have not in­creased at the rate they have in other States over the past decade.

For ex­am­ple, Perth’s me­dian house price for the year to June 2017 was $520,000, which is only about $60,000 more than it was at the same time in 2007. The Sydney hous­ing mar­ket has seen its me­dian house price in­crease by a stag­ger­ing $600,000 over this same pe­riod, mak­ing it sub­stan­tially more dif­fi­cult for first home­own­ers to en­ter that mar­ket.

The dream of home own­er­ship is still at­tain­able in WA.

REIWA anal­y­sis shows it is more fi­nan­cially at­tain­able to be a home­owner in 2017 than it was in 2007, with West Aus­tralians now spend­ing a smaller per­cent­age of their to­tal in­come on mort­gage re­pay­ments than they did a decade ago.

Home own­ers were spend­ing about 56 per cent of their to­tal in­come on mort­gage re­pay­ments in 2007, whereas to­day that fig­ure has re­duced to 27 per cent. This im­prove­ment in af­ford­abil­ity for WA home­own­ers can largely be at­trib­uted to av­er­age in­come lev­els hav­ing in­creased since 2007.

At the same time, in­ter­est rates have gone down and house prices have re­mained rel­a­tively on par.

Home­buy­ers re­main in a strong po­si­tion in Perth, but the signs do in­di­cate the lo­cal prop­erty mar­ket has sta­bilised. Since July 2017, reiwa.com’s monthly data has re­vealed steady fig­ures across sev­eral key in­di­ca­tors, such as me­dian house price, me­dian rent price and list­ings for sale and for rent. His­tor­i­cally, one of the strong­est in­di­ca­tors a prop­erty mar­ket may be on the cusp of “turn­ing” is a pe­riod of sta­bil­ity.

If you have been hold­ing off mak­ing a prop­erty pur­chase be­cause you’re wait­ing for the “bot­tom” of the mar­ket to buy at the low­est pos­si­ble price, I’d ad­vise you to take ac­tion sooner rather than later.

We don’t usu­ally have the lux­ury of call­ing the “bot­tom” of the mar­ket un­til we have the ben­e­fit of hind­sight, mean­ing we’re not cer­tain the mar­ket has turned un­til it is on the way back up. With im­proved house prices, record-low in­ter­est rates and a healthy sup­ply of stock, now is the time to take ad­van­tage of Perth’s buy­ing con­di­tions.

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