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Author: REIWA President Damian Collins
Western Australia remains one of
the most affordable places to buy property in the country. While first home
buyers around the country are increasingly priced out of the market, the dream
of home ownership is still very achievable for most West Australians.
The Real Estate Institute of
Australia (REIA) released their Real Estate Market Facts report last month
which showed that during the March 2022 quarter, Perth had the most affordable
median house sale price of any capital city in the country at $525,750.
To put our affordability into
context, REIWA calculated how long it would take for Perth’s median house sale
price to catch up to the current median prices in other capital cities at an
annual growth rate of five per cent.
The analysis showed it would take
23 years for Perth’s median house sale price to catch Sydney’s $1.59 million
median, it would take 18 years to catch Melbourne’s $1.22 million median, 13
years to catch Canberra’s $982,000 median, 10 years to catch Hobart’s $820,000
median and eight years to catch Brisbane’s $760,000 median.
Even though we are the most
affordable state and have the highest proportion of first home buyers in our
owner-occupier market of any state or territory in the country, more needs to
be done to ensure first home buyers remain an active component of our local market.
It is well known that stamp duty is one of the biggest financial imposts
placed on first home buyers when trying to save for a home. For most first home
buyers, servicing a loan is manageable, it is the upfront cost of a deposit and
stamp duty (which equates to an extra $20,000 on top of the deposit for a
median priced home in Perth) that presents the biggest challenge.
One way to ease this burden would be to ensure the duty-free thresholds
and concessional rates for first home buyers are reflective of where the market
is at. The Perth median house sale price has experienced strong price growth
over the last couple of years, which is why the First Home Owner Rate duty-free
threshold should be lifted from $430,000 to $530,000, to reflect where the
market is at.
This would help more West Australians buy their first home and free up
some much-needed rental stock.
For more information about housing affordability in WA, read the latest results for the March 2022 quarter.
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