WA Housing Affordability Declines Due to Rising Property Prices

Western Australia faces significant housing affordability issues, with rising house prices and mortgage repayments outpacing salary growth. Recent data indicates that the percentage of household income required for loan repayments has climbed to 39.5%, reflecting an increase from last year.

Potential home buyers must stay informed about how ongoing shifts in the real estate market could impact their financial decisions. That’s where Nfinity Financials comes in—we're here to help you navigate these complexities and secure the best mortgage options.

The Impact of Rising Property Prices

Over the past year, property values in Western Australia have surged, leading to increased mortgage payments. Although interest rates have stabilized since late 2023, the average house price in Perth has risen by 20.5%, resulting in a 16.1% increase in monthly mortgage payments. This puts considerable pressure on first-time buyers trying to budget for homeownership.

Demand and Supply Dynamics

The spike in property prices is primarily driven by high demand and limited housing availability. A growing population and slow housing development have exacerbated the situation, especially in sought-after areas. Nevertheless, Western Australia remains one of the more affordable states in the country, with only the Northern Territory and Australian Capital Territory having lower mortgage repayment requirements.

Continued Loan Activity

Despite the challenges posed by affordability, Western Australia is witnessing robust loan activity. Owner-occupier loans rose by 13% in the June quarter, with a significant portion coming from first-time homebuyers. The average loan amount for these buyers has also increased by 17% year-on-year, reaching $475,393, indicating ongoing demand in the housing market.

Rental Affordability Concerns

On the rental side, households now spend an average of 23.6% of their income on rent, an increase from the previous quarter. The average weekly rent for a house is currently $650, while apartments average $600. However, the influx of newly built homes held by investors has stabilized rental prices somewhat.

What Home Buyers Should Consider

The current housing landscape presents both challenges and opportunities for buyers and investors. With property prices increasing and loan repayments increasing, it is crucial to evaluate your financial options carefully.

Now is the time to seek expert advice on securing the best mortgage. Staying informed about market trends and exploring various financing options will empower you to make informed decisions in this dynamic environment.

Would you be ready to explore your mortgage options? Contact Nfinity Financials today to schedule a consultation. Our team of experts is here to guide you through the evolving housing market and help you find a loan that meets your needs.

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