WA housing affordability down slightly in September quarter

Dec 19, 2022, 10:14 AM

While mortgage serviceability declined slightly in the September quarter, the Perth market is weathering interest rate changes well.

Title : WA housing affordability down slightly in September quarter

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News date : Dec 19, 2022, 00:00 AM

Housing affordability declined Australia-wide in the September 2022 quarter. All states and territories recorded decreases according to the latest REIA Housing Affordability Report.

In WA, the proportion of income required to meet loan repayments* rose 3.2 percentage points to 31.4 per cent. It was the smallest increase across the states.

“While mortgage serviceability declined slightly in the September quarter, the Perth market is weathering interest rate changes well,” REIWA CEO Cath Hart said.

“This is supported by a strong economy, low unemployment and population growth.

“In addition, Perth is also the most affordable capital city in Australia by median house price, which has allowed buyers and mortgage holders to absorb interest rate increases so far.”

Tasmania recorded the greatest increase in loan servicing pressure, up 5.9 percentage points to 40.2 per cent. New South Wales homeowners faced the greatest affordability challenge, requiring 51.6 per cent of their income to service monthly mortgage repayments.

The Northern Territory was the most affordable state for mortgage serviceability. The proportion of income required to meet loan repayments sat at 31.1 per cent, just below WA.

First home buyers made up 37.3 per cent of WA’s owner-occupier market in the September 2022 quarter.

They were less active than in the previous quarter, with the number of loans issued in that time decreasing 6.6 per cent to 3,992. This was 28.3 per cent lower than the same time last year.

The average loan to first-home buyers increased to $396,293, up 2.2 percent on the June 2022 quarter and 8.4 per cent annually.

The total number of new loans decreased to 10,701 in WA, 8.1 per cent less than the previous quarter and 18.6 lower than in the past 12 months. The average loan size was $467,910. This was a decrease of 1.1 per cent over the quarter but an increase of 7.5 per cent over the year.

WA tenants received a reprieve in the September 2022 quarter. Rental affordability was unchanged from the June quarter, requiring 19.8 per cent of income to meet rental payments. However, this was 0.8 percentage points higher than at the same time last year.

Victoria was marginally more affordable for tenants than WA, with 19.7 per cent of income required, while Tasmanian tenants were the hardest hit with 30 per cent of their income going towards rental payments.

*Based on a median weekly family income of $2,379 and an average monthly repayment of $3,239.

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