Western Australia remains one of the most affordable places to buy property in the country. While first homebuyers around the country are increasingly priced out of the market, the dream of homeownership is still very achievable for most Western Australians. The Real Estate Institute of Australia (REIA) released its Real Estate Market Facts report last month, which showed that during the March quarter, Perth had the most affordable median house sale price of any capital city in the country at $525,750.
To put our affordability in 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 homebuyers in our owner-occupier market of any state or territory in the country, more needs to be done to ensure first homebuyers remain an active component of our local market.
Stamp duty is one of the biggest financial imposts placed on first homebuyers when trying to save for a home. For most first-time 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 homebuyers 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 Western Australians buy their first home and free up some much-needed rental stock.
