Perth home affordability best in years
Perth property is more affordable than it has been at any time in the past decade, the Housing Industry Association says.
The HIA said rising wages and falling interest rates have helped offset increasing house prices, making properties as affordable now as they were 10 years ago when they cost about half as much.
The association’s affordability index for Perth property is at 69.1 per cent – the best since December 2003 when it was 70 per cent.
It may be surprising given the median price for a WA dwelling is $575,000, more than twice the December 2003 median cost of about $271,000.
HIA chief economist Harley Dale said interest rate cuts helped offset the higher house costs, with a fall from 6.8 per cent on variable loans a decade ago to 5.35 per cent in the last quarter.
The rate changes have had a favourable impact on mortgage payments, which average $3128 a month compared with $1441 a decade ago. Mr Dale said homeowners were better able to service bigger mortgages because WA’s average weekly wage was $1662, compared with $926 a decade ago.
The HIA research shows the most unaffordable time in the past decade was early in the boom year of 2007, when the index hit a low of 41.1 per cent.
However, Perth was still very costly compared with all other capital cities except Sydney.