Owning a home attainable
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.