Article source: Gareth Hutchens – The West Australian Newspaper
Perth has one on the most affordable housing markets of any capital city in Australia, with an average Perth resident needing only about seven years to save a 20% deposit for a property purchase.
A report from ANZ and Core-Logic reveals housing affordability is the best it has been in years in Perth.
Over the past decade, Perth dwelling values increased a sluggish 4.9% while household incomes rose 32% over the same period.
In some areas it only takes 5 or 6 years to save for a deposit. These areas include Armadale (5.8 years), Kwinana (5.1), Rockingham (5.9), Swan (5.9), Serpentine (5.4), Wanneroo (6.2) and Gosnells (6.2).
Other areas, the median dwelling value is about four or five times a household’s annual gross income – these include Armadale (4.3 dwelling value to income ratio), Joondalup (5.4), Perth city (5.4), Rockingham (4.4), Swan (4.4) and Wanneroo (4.6).
However, Cottesloe-Claremont remains the most expensive area – it still takes 14.5 years on average to save for a 20% deposit there, with a 10.9 dwelling value to income ratio.
Across Perth, the average renting household is spending 23.1% of its income on rent, while those paying a mortgage are spending 28.4% of their income servicing an 80% loan to value ratio mortgage.
The only cities in which it is faster to save a deposit are Darwin (4.8 years on average) and Canberra (6.9 years) – taking into account the average level of household incomes in each city.
Housing in regional WA is also more affordable than it was a decade ago because of the substantial decline in dwelling values post-resources boom. The dwelling value to household income ratio hasn’t been as low as it is currently since March 2005. Similarly, declines in rents over recent years have meant renting has also become more affordable.
Over the past decade, dwelling values in regional WA fell 14% while household incomes increased 25.4%, which led to the big improvement in housing affordability.