PERTH is Australia’s most affordable capital city according to the December quarter 2018 Affordability Report by the Housing Industry Association.
Affordability improved 2.6 per cent during the quarter and 5.7 per cent over the year to December and was well above the 20 year average.
The report stated Perth prices had been declining fairly consistently for a number of years, with the most significant falls evident at the low-end of the market.
There, prices were down 22.1 per cent from the previous peak, which was good news for people looking to enter the market.
Mid priced properties recorded a decline of 15.7 per cent, while prices in the top quartile have dropped 7.6 per cent.
With prices continuing to fall and interest rates still low, mortgage repayments as a percentage of full time earnings also dropped, down to 26.5 per cent from 28 per cent a year ago.
According to the report a typical Perth mortgage repayment was $2146 per month in the December quarter.
Despite much-hyped price declines in Sydney and Melbourne, they remain Australia’s least affordable capital cities.
Mortgage repayments were 50.6 per cent of average earnings in Sydney and 44.2 per cent in Melbourne, with the typical repayment was $4162 and $3356 respectively.
Affordability improved on a national basis with the building boom and wages growth cited as being behind the improvement.
HIA senior economist Geordan Murray said 2018 was the fifth consecutive year where the industry commenced construction of over 200,000 homes and it was a record year in terms of new dwelling completions.
“This strong flow of new housing supply is one of the key factors behind the moderation in price pressures in housing markets across the country, which has ultimately improved housing affordability,” he said.
“The other key factor has been the modest improvement in wages growth.
“Strong growth in employment over the last two years has boosted demand for workers.
“We are seeing the early signs that this tightening in the labour market is translating into rising wages.”