Homeowners at all-time comfort level as renters struggle, WA housing affordability report finds

 In Home News Section, Uncategorized

Perceptions of housing affordability have improved in Western Australia but there are very different stories being told by homeowners and renters as the COVID-19 pandemic alters the property landscape.

The Bankwest Curtin Economics Centre (BCEC) has found owner-occupiers are more comfortable than they have been in years.

But many renters, particularly single parents, are struggling to make ends meet.

About 4,000 households in WA, New South Wales and Queensland were surveyed for a report released today titled Housing Affordability in WA: a tale of two tenures.

About 53 per cent of respondents in WA said they considered their housing affordable, an improvement from 39 per cent in 2015.

The report found the comfort among homeowners was partly driven by lower mortgage interest rates.

Average renter pays an extra $60 per week

According to the report, the average weekly rent in WA has increased by $60 since September 2020 due to high demand for rentals and a limited supply of homes available to rent.

The median rent for a home in Perth had risen to $430 by March.

Report co-author Professor Alan Duncan said pressure on the “already tight rental market” would get worse in coming months as the full impacts of the lifting of the rental moratorium were felt.

Professor Duncan said both the regions and the city were affected and many vulnerable people would not be able to stretch much further.

“In regional areas such as Port Hedland and Karratha, median rents for units have risen by over $100 per week over the year to March 2021, while median rents for homes in South Perth have risen by $150 per week,” he said.

“If rents were to increase by 10 per cent, this would have a major impact on the financial wellbeing of more than 100,000 renters in WA, disproportionately affecting those receiving rent assistance.”

About 40 per cent of those surveyed said high housing costs were affecting their mental health.

Single parents were found to be particularly vulnerable, with 40 per cent of those families spending almost a third of their income on housing.

Relief from home-building boom a way off yet

The report noted there were currently huge incentives to buy property, caused by confidence in the economy and COVID-19 stimulus measures which had led to a home-building boom.

Almost half the West Australians who purchased homes in the last six months said government incentives allowed them to bring forward their decision to buy.

Forty-three per cent said they would not have been able to buy a property without the incentives.

Dwelling approvals in WA rose by 118 per cent over the year to April 2021 and housing loans hit a historic peak in February.

About $2.4 billion in loans were allocated to the sector, double that of the previous year.

Report co-author Professor Steven Rowley said increased housing stock would “eventually” ease rental pressures, with up to 10,000 households set to shift out of rentals and into their own homes in the next six to 12 months.

“Which will ease pressure on the rental market, but it provides little relief to those currently searching for accommodation or dealing with rent increases,” he said.

Professor Duncan said growth in people buying or building property for the first time was pushing property prices up.

“And for some, that’s actually pushing the aspiration to own a property further away from their reach,” he said.

By March 2021, the vacancy rate in Perth had fallen to 0.9 per cent, down from a 2017 peak of 7.3 per cent.

(Original ABC Article)