It seems like more buyers are now setting their sails for a journey to a more affordable housing market in Western Australia.
The latest edition of Adelaide Bank/Real Estate Institute of Australia (REIA) Housing Affordability Report revealed that Western Australia was the most affordable state to rent and own a home.
Real Estate Institute of Western Australia President Damian Collins told Williams Media that the state’s housing market provides a wide range of affordable choices for both tenants and home buyers.
According to the report, households in Western Australia only need to allot 22.7% of their income to meet loan repayments. On the other hand, the average loan size in the state has declined by 4.6% to roughly $339,000.
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"While it appears we’ve reached the bottom of the market and improvements are expected in 2019, buyers and tenants remain the beneficiary of the current market, enjoying improved affordability, record-low interest rates and a good supply of housing stock to choose from," he said.
While New South Wales showed the biggest improvement in housing affordability over the period, its gap with Western Australia remained wide — New South Wales homeowners need at least 36.6% of their income to comfortably afford repayments, with loans averaging $470,000.
There are also more first-home buyers in Western Australia, comprising 35.1% of all homebuyers compared to 23.2% in New South Wales.
"Although the Sydney market has started to cool, the dream of homeownership remains unattainable for many Australians on the East Coast. We’re lucky that this dream is very much alive in Western Australia, which is evident by the large proportion of first-home buyers Western Australia has retained," Collins said.
Meanwhile, the proportion of income required to rent in Western Australia dropped to 16.1% --- significantly lower than in New South Wales (28.5%) and Victoria (23.4%).
"We’ve observed significant improvements in the Perth rental market during 2018, and while this upward trajectory is expected to continue in the New Year, the rental market remains affordable for tenants, with Perth’s median rent having held at $350 per week since April 2017," Collins said.
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