BCEC Report

Housing Affordability in WA: A tale of two tenures

Report SeriesFocus on WA
AuthorsAdam Crowe, Alan Duncan, Amity James, Steven Rowley
PublishedJune 2021
PublisherBankwest Curtin Economics Centre
Number of Pages158

This report by the Bankwest Curtin Economics Centre focuses on housing affordability and features findings from the fourth BCEC Housing Affordability Survey of 4,000 households across Western Australia, New South Wales and Queensland.

This fifteenth report in BCEC’s Focus on WA series builds on the Centre’s earlier reports into Housing Affordability and finds that housing affordability has improved in Western Australia but this improvement has been uneven, with a significant divide between those who own their home and those who are renting. It finds that owner-occupiers are more comfortable now than they have been in some time, whereas many in the private rental market, particularly single parents, are struggling to make ends meet.

Key findings:
  • Perth’s residential property price index has risen 9.6 per cent to 109.2 between December 2019 and March 2021.
  • Perth now ranks third among states for annual growth in the price of established house, behind Hobart and Sydney.
  • Nearly 11,000 dwellings were approved in WA between January and April 2021. This compares to under 4,800 approvals over the first four months of 2020.
  • Housing loans in WA reached a historic peak in February 2021, with around $2.4 billion in loans allocated to the housing sector – twice the value of the previous year.
  • More than 22,000 new housing loans to first home buyers in WA were approved in the 10 months between July 2020 and April 2021 – nearly double the number compared to the equivalent period a year earlier.
  • From a peak of 7.3 per cent in June 2017, the vacancy rate in Perth has fallen dramatically and now sits at 0.9 per cent as at March 2021
  • The median rent for houses in Perth has risen by $20 per week in each of the three quarters from September 2020 to March 2021 – a combined increase of $60 to $430 over nine months.
  • Typical rental costs for listings of 3-bedroom houses in Perth have risen by 5.3 per cent over the quarter to March 2021, and by 14.3 per cent over the last year.
  • The proportion of WA respondents regarding their housing as affordable has risen from 39% in 2015 to 53% in 2021
  • In 2021, 40% of respondents renting or owning with a mortgage were paying over 30% of their income on housing cost, a drop of 5% on 2019 and 8% on 2015.
  • 11% of respondents over 65 are paying over 30% of their income on housing costs and over 40% of one parent families pay more than 30% of their income on housing costs.
  • A 10% increase in rent would have a major impact on the financial situation of 42% of private renters. This means over 100,000 rental households are vulnerable to rent increases.
  • Since 2015 there has been a decline in the proportion of households having difficulty meeting housing costs, with the proportion frequently struggling falling from 24% to 11% in 2021.
  • Private renters had the most difficulty meeting housing costs with 34% regularly struggling compared to 26% of those with a mortgage
  • One parent families and multi-generational households were in the least favourable position with well over 40% regularly struggling to meet housing costs.
  • 1 in 5 one parent family households rate their housing an unaffordable and 40% are paying over 30% of their income on housing costs.