Housing affordability has improved in Western Australia, but the improvement has been uneven, with a large gap between those who own their homes and those who are renters.
Released today by the Bankwest Curtin Economics Center, Housing Affordability in WA: A tale of two tenures presents the results of the fourth BCEC Housing Affordability Survey of 4,000 households in Western Australia, New -South Wales and Queensland.
He finds homeowners are more comfortable now than they’ve been for some time, as many in the private rental market, especially single-parent families, are struggling to make ends meet.
Report co-author and Bankwest Curtin Economics Center director John Curtin, professor emeritus Alan Duncan said the divide is likely to widen in the coming months as the effects of the lifting of the moratorium on rents were being realized and the pressure continued in an already tight rental market.
âRents in Western Australia have increased by an average of $ 60 per week since September 2020 due to strong rental demand and the limited supply of homes available for rent, and are expected to rise further now that the moratorium is lifted. Said Professor Duncan.
âIn regional areas such as Port Hedland and Karratha, median unit rents increased by more than $ 100 per week during the year through March 2021, while median house rents in South Perth increased by $ 150 per week.
“If rents were to increase by 10%, it would have a major impact on the financial well-being of over 100,000 tenants in Western Australia, disproportionately affecting those who receive rent assistance.”
Report co-author Dr Amity James, deputy director of the Curtin University research center of the Australian Housing and Urban Research Institute, said there had been great improvements in perceptions of the affordability, with the proportion of WA households who rate their housing as affordable rising from 39 percent in 2015 to 53 percent in 2021.
“There has also been an increase in the number of low and moderate income households considering their housing affordable compared to 2019 and these trends are in part due to lower mortgage interest rates,” said Dr James .
âSince 2015, there has been a decrease in the number of households having difficulty meeting housing costs, the proportion frequently in difficulty falling from 24% to 11% in 2021.
âThere have also been great improvements in the way housing costs affect various areas of life such as mental and physical health, social life and spending for children.
âDespite overall improvements in housing affordability, a number of households remain vulnerable or have seen no improvement in affordability and around 40% of respondents said high housing costs affect their mental health.
âSingle parents are particularly vulnerable to increases in housing costs, with one in five families finding their housing unaffordable and 40% paying more than 30% of their income in housing costs. “
The report’s co-author, Professor Steven Rowley, director of Curtin University’s research center at the Australian Housing and Urban Research Institute, said the increase in the housing stock should eventually ease price pressures. rents.
âGrowth in the number of homes approved in WA had increased by 118% in the year through April 2021, albeit from a very low base, while home loans in WA reached a low. all-time high in February 2021, with around $ 2.4 billion in loans. allocated to the housing sector – twice the value of the previous year, âsaid Professor Rowley.
âBased on the first-time homebuyers who apply for HomeBuilder and the Building Bonus program, there could be around 10,000 households leaving the private rental market over the next 6 to 12 months, which will ease the pressure on the rental market. , but will bring little relief to these. currently looking for housing or facing rent increases.
âFirst-time homebuyers have been the big winners in government assistance, with over 22,000 new home loans made to first-time buyers in WA approved in the 10 months between July 2020 and April 2021 – nearly double the number compared to a year earlier and first-time home buyers receiving a larger share of new home loans than non-first-time buyers for the first time since 2009.
“Almost half of those who bought in the past six months said government incentives had enabled them to advance their buying decision and 43% of those who bought in the past two years said that ‘they could not have bought without the incentives. “
The report also showed the strength of activity in Washington state’s housing market as the economy recovered during the COVID-19 pandemic, with Perth now ranking third among states for annual growth in the price of an established home, behind Hobart (+ 6.6 percent year-on-year) and Sydney (+ 5.3 percent).
Among the report’s other findings, COVID-19 had changed what about 20% of households expect from their homes, mainly signaling an increased desire for additional indoor and outdoor space and access to amenities.