Dark clouds looming over housing affordability: REIWA

The number of properties for sale in Perth has fallen to its lowest level for two years, placing renewed pressure on housing affordability, new research says.

Figures released today by the Real Estate Institute of Western Australia put the number of properties on the metropolitan market at 12,975 at the start of June, the lowest level since April 2010.

REIWA deputy president Ian Cornell said while the figures showed confidence was returning to the market, a collapse of building approvals in April was a major concern.

Building approvals slumped by 46.7 per cent following the introduction of the new building Act in April, Mr Cornell said.

“In recent weeks the Housing Industry Association has expressed deep concerns with new bureaucratic red tape which it believes is hampering the building sector and slowing the construction of new homes,” he said.

“If this persists for a few more months we will see a fall in new dwelling starts for both the June and September quarters.

“This will ultimately lead to a supply imbalance that will, in turn, put pressure on established housing.

“The knock-on effect will ripple through the existing residential housing market and put price pressure on both buyers and renters for the latter half of 2012.”

Mr Cornell the figures added to concerns arising from a national report released earlier this week that showed WA and the Northern Territory were the only states in Australia to record falls in housing affordability over the March quarter.

According to the report, released by the Real Estate Institute of Australia, 24.1 per cent of the average family income is now required to meet home loan repayments.

Mr Cornell, however, said a larger worry was affordability pressure on renters.

“The proportion of income required to meet the median rent in Perth grew by 0.7 per cent in the March quarter and now stands at almost 21 per cent,” Mr Cornell said.

“The good news is that the number of first home buyers increased by 4.1 per cent in the quarter, up by a whopping 36.4 per cent on March last year.”