Western Australia has the lowest rate of housing affordability in the nation, according to a new study by the Urban Development Institute of Australia.
Just three of the 11 areas surveyed in WA – Geraldton, Kalgoorlie and Karratha – are considered affordable for detached housing (meaning the average household can afford to buy 51 per cent or more of the housing available in their local area).
Affordability in Mandurah is rated as seriously constrained, while Albany, Augusta, Broome, Bunbury and the three regions of Perth (inner, middle and outer) are classified as unaffordable.
In WA, affordability plummeted from 81 per cent of houses on the market in 2001 to just 13 per cent in 2006.
Nationally, affordability fell from 71 per cent to 29 per cent.
UDIA WA executive director Debra Goostrey said the key to relieving pressure on homebuyers was to improve housing supply.
“If you don’t address the supply issue, then incentives (for homebuyers) will just go into bidding up the price of land and housing,” she said.
Ms Goostrey said allowing tax deductions on mortgage repayments, under certain arrangements, and permitting voluntary superannuation contributions to be withdrawn for housing deposits, were among the strategies that could be considered.
However, she said a complete legislative review of the development approvals process was essential to improving supply and affordability.
“We’d like to see this as a priority, to really demonstrate the will of the government to improve the approvals process,” Ms Goostrey said.
She said development approvals needed to be more streamlined, with less duplication across government agencies.
“This is a genuine issue that will affect the state’s development. If we can’t get sufficient housing product on the market, we won’t get sufficient workers to keep the economic growth going,” she said.
The report found WA’s median house price increased by 258 per cent between 2001 and 2006.
