Home Buyers Benefit from Slight Uptick in Wages

After months of mounting pressure, Western Australia has seen its first improvement in housing and rental affordability since September 2023. While not a full reversal of the affordability crunch, the shift signals a potential turning point in the state's tight property market.

The Real Estate Institute of Australia’s latest Housing Affordability Report reveals that WA experienced its first affordability improvement in three quarters. For renters, this came as a slight drop in the proportion of income required to meet median rental payments — down from 24.7% in the December quarter to 24.4% in March. While the change may seem minor, it breaks a worrying trend and brings hope of further easing.

For those looking to buy, housing affordability also improved. The percentage of income needed to meet average loan repayments fell from 35.6% to 34.9%, driven in part by modest wage growth across the state. This improvement puts WA ahead of the national average (which held steady at 45.7%) and solidifies its position as the most affordable state for home buyers in Australia.

Western Australia continues to lead the nation in both rental and home purchase affordability. For home buyers, WA boasts the lowest proportion of income needed to service a loan. In the rental market, only South Australia ranks slightly ahead. This comparative advantage is critical in attracting interstate and overseas migration, which fuels local demand.

Despite these positive indicators, affordability remains a concern. Rental vacancy rates are still extremely low, and supply constraints persist in both the rental and sales markets. While the latest figures offer a breath of fresh air, sustained affordability will depend on increased housing stock and strategic policy support.

It’s good news that affordability is moving in the right direction — even if only slightly. For renters and homebuyers feeling the pinch, the hope is that this marks the beginning of a broader trend toward a more balanced and accessible market.

If you'd like to talk about how this will affect your property plans, don't hesitate to contact the team at Bellcourt on 08 6141 7848.