Housing affordability at worst level in 30 years

Housing affordability in WA is at the worst level since 1996, according to data from the Real Estate Institute of Australia (REIA).

The latest REIA Housing Affordability Report shows the proportion of family income needed to meet loan repayments in WA rose 2.3 percentage points over the March 2026 quarter to 45.9 per cent.

This eclipses the previous peak of 41.2 per cent set in the September 2008 quarter.

REIWA President Suzanne Brown said the decline in affordability was driven by increases in interest rates in February and March, combined with ongoing strong growth in property prices in the first three months of the year.

“Most of the March quarter was characterised by lower-than-average new listings and consistently strong demand,” she said.

“This saw the rate of price growth accelerate, with Perth’s median house sale price* reaching $900,000 at the end of the quarter. This was an increase of 5.3 per cent on the December 2025 quarter. The median unit sale price* was $642,000 at the end of the March quarter, up 7.0 per cent on the previous quarter.

“Strong price growth usually leads to larger mortgages, and when you combine this with two interest rate increases that have added approximately $200 per month to a mortgage of $700,000, you see a sharp decline in affordability.

“Although the rate of price growth is easing over the June quarter, a third interest rate increase in May is likely to see affordability decline further."

Housing affordability in WA also declined over the year, with the proportion of family income required to meet loan repayments increasing 5.2 percentage points from 40.7 per cent in the March 2025 quarter.

Housing affordability declined in all other states and territories in the March 2026 quarter. Tasmania recorded the largest decline, at 2.7 percentage points, followed by the Northern Territory at 2.5 percentage points.

Despite housing affordability continuing to decline, WA remained relatively affordable when compared with many other parts of the country. Only Tasmania, the Northern Territory and the Australian Capital Territory were more affordable for home buyers.

New South Wales was the least affordable state, with 58.4 per cent of family income required to meet mortgage repayments.

Table 1: Proportion of median family income to meet average loan repayments

Source: Real Estate Institute of Australia (REIA).

*REIWA publishes an annual median sale price based on pending and settled sales.

Loan activity

There were 9,150 loans to owner occupiers in WA in the March 2026 quarter, a decrease of 15.5 per cent compared with the December 2025 quarter, and 5.7 per cent over the year.

The average loan size was $702,699. This was an increase of 2.1 per cent over the quarter and 18.4 per cent over the year.

Ms Brown said the decline in the number of loans was to be expected, as was the increase in average loan size.

“While demand was strong in the March quarter, listings were lower than usual, which resulted in fewer sales and, therefore, fewer loans,” she said.

“This increase in the average loan size reflects the strong growth in property prices, with people needing larger loans to purchase a property.”

While the number of loans to first home buyers declined 11.4 per cent over the quarter to 3,515, they made up 38.4 per cent of owner occupier loans. The average loan size for first home buyers increased to $607,312, up 4.0 per cent over the quarter and 19.7 per cent over the year.

While down on the December quarter, the number of loans to first home buyers was 2.3 per cent higher than the March 2025 quarter.

“There is always a lot of discussion about the many challenges faced by people looking to buy their first home, but the data shows first home buyers remain very active in the WA market,” Ms Brown said.

“Government programs like the 5% Deposit Scheme and Help to Buy at the Federal level, along with Keystart in WA, are helping first home buyers overcome a number of barriers to entering the property market.”

Rental affordability

Rental affordability also declined in the March 2026 quarter.

The proportion of family income required to meet rent payments increased by 0.5 percentage points to 24.6 per cent. This exceeds the previous peaks of 24.4 per cent and 24.5 per cent recorded in 2013 and 2009 respectively.

“While the rate of rent price growth eased throughout 2025, it accelerated in the March quarter,” Ms Brown said.

“Perth’s median weekly house rent price increased 4.3 per cent in the March 2026 quarter to $730, while the median unit rent price increased 3.7 per cent to $700.

“This strong growth has impacted rental affordability.

“With the vacancy rate tightening over the past couple of months and investor purchasing activity decreasing following the Federal Budget announcements, we are likely to see affordability decline further in the June quarter.

“And while the changes to negative gearing and the capital gains tax discount may drive investors towards new builds, it will take 12 to 18 months before these come to the market and provide any rent relief.”

Rental affordability in WA also declined slightly over the year, with the proportion of family income required to meet loan repayments increasing 0.6 percentage points from 24.0 per cent in the March 2025 quarter.

Nationally, rental affordability improved in Victoria, the Northern Territory, and the Australian Capital Territory in the March 2026 quarter. It declined in New South Wales, Queensland, South Australia, and Tasmania.

Tasmania overtook New South Wales as the least affordable state for tenants, with 27.3 per cent of family income needed to meet rent payments. The ACT was the most affordable at 18.7 per cent.

Table 2: Proportion of family income required to meet rent repayments

Source: Real Estate Institute of Australia (REIA).