WA Sees First Improvement in Housing Affordability Since 2023

After a year of rising costs and tight conditions, Western Australia has recorded its first improvement in housing affordability since September 2023. According to the latest Housing Affordability Report from the Real Estate Institute of Australia (REIA), the proportion of family income required to meet loan repayments in WA dropped to 40.8% in the March 2025 quarter—down 1.7 percentage points from the previous quarter.

REIWA President Suzanne Brown attributed the improvement to a combination of lower interest rates and rising incomes. The Reserve Bank’s decision to cut the cash rate by 0.25 percentage points in February made a noticeable impact on mortgage repayments. At the same time, WA’s median weekly family income rose 1.1%, increasing from $2,675 to $2,709 over the quarter. Together, these changes helped ease the pressure on borrowers despite continued property price growth.

There may be more good news on the horizon, with another interest rate cut in May potentially contributing to further affordability gains in the June quarter. Still, the past year has seen affordability decline overall, with the proportion of income needed for repayments rising 2.9 percentage points compared to March 2024. This reflects the significant 22% rise in Perth’s median house price over the same period, now sitting at $775,000.

While housing affordability improved across most of Australia in the March quarter, the Northern Territory saw a slight decline. WA maintained its position as the most affordable state in the country—trailing only the two territories—while New South Wales remained the least affordable, despite a slight quarterly improvement.

The March quarter also saw a dip in loan activity. WA recorded 9,635 new owner-occupier loans, down 9.6% from December but up slightly year-on-year. The average loan size fell 0.8% to $594,250 but remained 14.2% higher than a year earlier. First home buyer activity softened, with 3,446 loans issued—down 10.5% from the previous quarter and 9% year-on-year. However, the average first home buyer loan rose to $506,965, reflecting an annual increase of 11.5%.

Rental affordability improved too, with the proportion of income needed to meet rent repayments falling to 24% in the March quarter—down 0.3 percentage points. This was partly due to higher median family incomes and changing rental market dynamics. REIWA noted an increase in supply and a slightly higher vacancy rate, both of which helped ease rental competition and stabilise prices. Nationally, rental affordability trends were mixed, with improvements in New South Wales, Victoria and the ACT, and declines in Queensland, Tasmania and the Northern Territory.

If you're a buyer, seller or investor keeping an eye on market shifts, WA’s latest housing affordability data is worth watching. With interest rate cuts taking effect and incomes rising, conditions could continue to improve—despite the broader backdrop of strong price growth.

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.