Perth housing most affordable

Perth continues to take out the title of Australia’s most affordable capital city when it comes to buying houses and apartments, driven by lower property prices and low interest rates, a report released today has found. 

In the year to March 2018, the proportion of income needed for mortgage repayments dropped to 19.2 per cent, down from 20.2 per cent in March 2017, according to data from ratings agency Moody's.

This was based on a two-income household taking out an 80 per cent loan-to-value loan to buy a property at the median price.

Moody's found Perth’s housing affordability was better than at any time in the past 10 years – the same claim it made six months ago when the last figures were released.

The improvement in the affordability of houses was most significant in Sydney, where prices fell 5.9 per cent, followed by Perth, where prices fell by four per cent.

According to the most recent monthly CoreLogic RP Data report, out earlier this week, Perth’s median house price sat at $464, 238 in April compared with the national average of $554,605.

The Moody's report also found that median housing prices in Perth fell by 3.5 per cent over the year to March 2018, which it said continued a decline that began in 2014.

The affordability of apartments in Perth also improved moderately, with apartment prices falling by 2.4 per cent over the year to March 2018.

Affordability also improved in Brisbane in the 12 months to March, but deteriorated in Melbourne and Adelaide.

The report also highlighted that Sydney had emerged as the city most sensitive to housing price, income and interest rate changes.

Moody's Investor Service vice president Alena Chen said nationally, affordability improved for both houses and apartments.

“On average across Australia, house owners needed 29.3% of monthly income to meet monthly mortgage repayments in March 2018, down 0.2 percentage point from March 2017, while apartment owners needed 24.9%, down 0.6 percentage point from March 2017,” Ms Chen said.

“Softening housing market conditions, particularly in Sydney and to a lesser extent Melbourne, will result in better housing affordability over 2018.

“Median housing prices in Sydney declined over the year to March 2018. We expect Sydney housing prices to continue to cool and for housing affordability in the city to continue to improve over 2018.

“In Melbourne, housing prices declined in recent months, but prices still increased strongly over the year to March 2018. We expect the tempering of house price growth in Melbourne over recent months tocontinue through 2018, a positive for housing affordability.”