Housing affordability in Western Australia was stuck at or near record lows at the end of 2007 in a telling sign that there remains an acute shortage of housing stock in the state.
The latest report from the Commonwealth Bank and Housing Industry Association shows that first home buyer housing affordability fell by 2.1 per cent in Perth in the December 2007 quarter, reflecting an interest rate rise in November and moderate house price growth.
Housing affordability improved by a very modest 0.3 per cent in Regional WA on account of flat house prices.
HIA executive director WA Sheryl Chaffer said that higher interest rates would see affordability decline in early 2008, but national housing policies to boost the supply of new dwelling stock had a vital role to play in restoring housing affordability to acceptable levels.
"The growing shortage of housing stock is placing significant pressure on already very tight rental markets and on the ability of aspiring first home buyers in WA to enter the home ownership market. However, the Federal Government has a number of policies on the table that will ensure a greater supply of new housing, which in turn will relieve this pressure," Ms Chaffer said.
"The recently announced First Home Super Saver accounts provide an important platform to promote and reward saving among budding first home buyers while also reducing inflationary pressure,
"The speedy implementation of measures to complement this policy by way of boosting housing supply will counter the consistently weak levels of home affordability."
Ms Chaffer said the abilities of the Housing Affordability Fund to reduce the cost of infrastructure borne by final buyers and the National Rental Affordability Scheme to generate affordable housing stock for lower income renters were examples of positive policies to address the crisis.
"This is a timely reminder to state and local government to be mindful of the cost impacts that changes such as developer contributions and sustainability measures can have on housing affordability."
