Western Australia is still the most affordable state to buy and rent in, with the state’s average loan size 19.4 per cent lower than the national average, according to the latest REIA Housing Affordability report.
The average loan size reduced to $397,739, a drop of 2.1 per cent over the quarter, and an increase of 7.3 per cent compared to the June quarter in 2019.
Hotspotting.com.au director Terry Ryder says the region has seen Covid-19 largely contained and mining is still a driver of the local economy.
“The Perth market has shown greater resistance to the pandemic impact than most Australian markets in terms of sales activity,” Ryder said.
The proportion of income required to meet loan repayments in the state reached 24 per cent in the June 2020 quarter, a drop of one per cent on the previous quarter, according to the REIA report.
For comparison, the proportion of income required to meet loan repayments is 42.3 per cent in New South Wales, with the average loan amount $605,050.
Despite the difficult economic conditions felt from the pandemic, REIWA president Damian Collins said the state had retained a large proportion of first home buyers.
“Although affordability has improved slightly across the country, the dream of home-ownership remains challenging for many Australians on the east coast,” Collins said.
The report shows that the number of first home buyers in the state dropped to 3,181, a decline of 10.3 per cent in the June quarter, and a decrease of 4.3 per cent compared to the same time in 2019.
Of the total Australian first home buyers over the quarter, 11.8 per cent were from Western Australia.
Corelogic data released this week showed there was no change to Perth’s property prices in the month of August. Melbourne, Sydney and, to a lesser extent Brisbane dwelling prices, recorded declines.
In its recent report, Standard & Poor Global Ratings said Western Australia has, for a number of years, had the nation’s highest mortgage arrears as a result of pressures since the end of the mining boom.
S&P added that Covid-19’s economic effect is unlikely to be as negative as other parts of the country, given the state's progress on containing the virus and the strong demand for iron ore.
The rating agency said that the WA's longer-dated arrears would likely still weigh on overall arrears performance.