Perth Housing Affordability Reaches a 10-year High
The combination of lower property prices, low interest rates and small increases in household incomes has made housing affordability in Perth the best it has been for 10 years, and the best of any mainland capital city.
In the year to September, the proportion of household income needed for 'median' mortgage repayments in Perth dropped 1.5 percentage points to 19.4 per cent, according to new 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 affordability was the most improved out of all Australian mainland capital cities, with the city now the most affordable in the country.
The affordability of detached houses in Perth improved, down 1.6 percentage points to 20 per cent, while apartment affordability fell 1.9 percentage points to 15.9 per cent.
Moody's said median house prices in Perth have been on a downward trend since 2014, and have fallen by 5.8 per cent in the year to September.
According to the most recent monthly CoreLogic RP Data report, out at the beginning of October, Perth’s median house price was $462,783.
The Moody's report also found affordability showed a small improvement in the year to September in Sydney; however, it was still the least affordable city in Australia.
In Sydney, the proportion of household income needed to meet mortgage repayments decreased by 0.5 percentage points to 36.2 per cent.
“The housing market in Sydney has shown signs of cooling since the introduction of regulatory measures in March to curb the origination of interest-only loans and housing investment loans,” Moody’s said.
“However, with housing prices in other cities such as Melbourne continuing to increase, the long-term efficacy of regulatory measures in moderating price appreciation remains to be seen.”
Melbourne recorded the biggest decline in affordability out of any capital city, with the proportion of household income needed to meet mortgage repayments having increased by 0.9 percentage points to 24.2 per cent.
Source: Business News
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