How you can buy a home for $200 a week
If you are looking for somewhere affordable to live, then look no further than Western Australia.
WA’s housing and rental markets are at the best levels we have seen for many years, with house prices and rents holding firm (and not falling significantly), despite the effect of COVID-19.
When looking at other states, the Housing Affordability Report found the proportion of family income required to meet home loan repayments was as high as 30.5 per cent. WA compares favourably with 25 per cent as a proportion of family income required to buy a first home in the March quarter 2020.
“With interest rates on home loans as low as 2.5 per cent, even taking out a $400,000 loan could cost less than $200 per week, which is cheaper than renting in many cases,” said REIWA President Damian Collins.
Affordability did improve across the country as markets in Sydney and Melbourne cooled. However, to put things in perspective, New South Wales homeowners still pay an average of 42.5 per cent of their family income on home loan repayments.
So, if you are looking to buy a home, or even invest in property if you are an out-of-towner, WA should be on your list of considerations. It’s fair to say, the dream of home ownership is alive in WA.
“If you are in a financial position to get into a home of your own to rent or buy, there has rarely been a better time,” Collins said.
Perth suburbs that provide great value
The biggest price increase to Perth’s median sale price occurred in suburbs including Ellenbrook, Claremont, Butler, Yokine, Yanchep, Gosnells, Kelmscott, Halls Head, Waikiki and Willetton.
Seven of these 10 suburbs had a median sale price under Perth’s median of $475,000.
Clearly WA homebuyers are taking advantage of properties in Perth that are priced at the lower end.
Of course, similarly to other states listings are down due to lockdowns and social distancing laws. These are now easing, so we should see an increase over the 11,299 properties for sale on reiwa.com in May.
The good news was listings were down by just 3.3 per cent from April and sales activity improved by 43 per cent in May following a particularly weak April. The bad news is WA’s listings are 30 per cent lower than this time last year.
The suburbs that saw the biggest improvement in sales were Halls Head, Ellenbrook, Rockingham, Byford, Yanchep, Wanneroo, Dianella, Waikiki, Balga and Armadale.
Should the WA government follow through on its consideration to cut stamp duty, while instigating further measures to encourage buyers to come back to the market and sellers to list, affordability in WA could be even better.
What about rentals?
If you can’t afford to buy a home, renting is definitely an option in WA.
However, given its cheap disposition, Perth’s rental stock has been quickly absorbed, with listings falling by 17 per cent in May to 4,676. This is the lowest stock available since November 2013.
There has been a 27 per cent increase in leasing activity this month compared with April, and the vacancy rate has dropped significantly in the last two years.
Meanwhile rental prices have remained stable with reiwa.com data showing the overall median rent sitting at $350 per week in Perth during May.
It is expected this price will remain stable for some time to come, at least until the end of the year, with any increase in rent only allowed on new rental listings.
Legislation implemented in the Residential Tenancies (COVID-19 Response) Act 2020, means occupied rentals cannot have a rent increase until October.
In May, Halls Head saw the biggest spike in leasing activity growth with 33 leases for the month and was closely followed by Nollamara (20 leases), Coolbellup (16 leases), Joondalup (18 leases) and Como (18 leases).
With all the negative news surrounding the property market, and as the government attempts to stimulate new home buys and renovations, WA has stood tall during the pandemic and provides an excellent example of Australia’s resilience in this sector.
This update is not financial advice. This article is general news and information.
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