Perth homes more affordable

HOUSING affordability in Perth improved 3.2 per cent in the June quarter amid slowing population growth and stagnant property values as Western Australia emerges from the post-resources boom slowdown. 

The Perth result was in marked contrast to the national figure, with affordability easing 3.7 per cent in the June quarter.

According to the Housing Industry Association Affordability Report released today, the capital city housing affordability index fell by 4.3 per cent during the quarter, whereas the regional market index was up 1.9 per cent.

HIA economist Geordan Murray said despite the decline in the national headline index, there was a significant variation of rates across the country between states and between capital city markets and regional markets. 

“The geographic variation in affordability is most evident in the comparison between Melbourne and Perth,” he said.

“Over the past year the median dwelling price in Perth has fallen 4.7 per cent while Melbourne’s has grown by 11.5 per cent.

“This has seen the affordability index for Perth increase by 6.2 per cent over the last year, while the index for Melbourne has fallen 6.2 per cent.”

Mr Murray said the differences mirrored the relative economic performance of the two states.

“The WA economy is navigating the tail end of the mining boom, which has seen conditions in the local labour market deteriorate and consequently the rate of population growth has fallen quite sharply,” he said.

“In contrast Victoria has experienced a healthy level of growth in the labour force and continues to record the strongest rate of population growth in the country.”

Three capital cities showed improvements in affordability during the June 2016 quarter – Perth up by 3.2 per cent, Darwin 2.9 per cent and Hobart 2.2 per cent.

Affordability declined elsewhere, with Melbourne down 7.4 per cent, Canberra -5.7 per cent, Sydney -1.6 per cent, Adelaide -1.3 per cent and Brisbane -1.0 per cent. 

Mr Murray said in contrast to the previous March quarter, which showed an improvement in affordability, the June quarter experienced the return of dwelling price growth and the index reverted to the level seen at the end of 2015.