Housing Affordability Crisis Looms in Western Australia as Rents and Loss-Making Sales Rise

Times Viewed: 3

A housing affordability crisis is threatening Western Australia, with higher property prices, increased rent, and interest rate rises putting pressure on rental markets, according to the Housing Affordability in Western Australia 2023 report by the Bankwest Curtin Economics Centre (BCEC) [1]. In Perth, house rents have risen by 13% over the past year, the largest increase among Australian capital cities, and unit rents have surged by 13.6% [1]. As demand for housing grows, largely driven by population growth, the rental market is experiencing extreme stress [1].

Tanya Steinbeck, CEO of the Urban Development Institute of Australia (UDIA WA), warned of the imminent housing affordability crisis in WA and urged for urgent attention to barriers to housing supply [1]. She highlighted the constraints on WA’s housing supply, which have resulted in record low rental vacancy rates [1]. According to CoreLogic’s Pain and Gain report, Perth saw the highest volume of loss-making property sales in the December quarter, accounting for nearly 20% of loss-making sales across Australia [2]. Perth also recorded the second-highest percentage of loss-making sales among capital cities, trailing only behind Darwin [2].

Steinbeck believes that the upcoming State Budget is an opportunity to address critical housing issues, and while positive measures have already been announced by the State, more focus should be placed on increased rent assistance and social housing [1]. UDIA WA has recommended that the McGowan Government make the Off-the-Plan Duty Rebate Scheme permanent and extend it to apartment projects under construction [1].

Despite the challenges, Property Powerhouse CEO Garth Davis is optimistic that Perth’s property market will experience price growth over the next three to four years once interest rates stabilize around June this year [2]. “Thousands of property buyers are sitting on their hands waiting for interest rates to reach their ceiling and then they will be out in the market selling their own house and looking to upgrade,” Davis said [2].

References

[1] Rowan Crosby, “Population growth and investment to drive Perth property market,” Bankwest Curtin Economics Centre (BCEC) report. https://thepropertytribune.com.au/market-insights/perths-housing-market-is-no-longer-affordable/ 

[2] Sarah Brookes, “All pain no gain for many inner-city Perth home owners,” CoreLogic’s Pain and Gain report. https://www.watoday.com.au/national/western-australia/all-pain-no-gain-for-many-inner-city-perth-homeowners-20230322-p5cue1.html