Perth has one of the most affordable housing markets of any capital city in Australia, with an average Perth resident needing only about seven years to save a 20 per cent deposit for a property purchase.
A report from ANZ and CoreLogic reveals housing affordability is the best it has been in years in Perth.
Over the past decade, its dwelling values increased a sluggish 4.9 per cent while household incomes rose 32 per cent over the same period.
In some areas it only takes five or six years to save for a deposit.
These include Armadale (5.8 years), Kwinana (5.1), Rockingham (5.9), Swan (5.9), Serpentine (5.4), Wanneroo (6.2) and Gosnells (6.2).
In some areas, the median dwelling value is about four or five times a household’s annual gross income.
These include Armadale (4.3 dwelling value to income ratio), Joondalup (5.4), Perth city (5.4), Rockingham (4.4), Swan (4.4) and Wanneroo (4.6).
However, Cottesloe-Claremont remains the most expensive area.
It still takes 14.5 years on average to save for a 20 per cent deposit there, with a 10.9 dwelling value to income ratio.
Across Perth, the average renting household is spending 23.1 per cent of its income on rent, while those paying a mortgage are spending 28.4 per cent of their income servicing an 80 per cent loan to value ratio mortgage.
The only cities in which it is faster to save a deposit are Darwin (4.8 years on average) and Canberra (6.9 years) — taking into account the average level of household incomes in each city.
Housing in regional WA is also more affordable than it was a decade ago because of the substantial decline in dwelling values post-resources boom.
The dwelling value to household income ratio hasn’t been as low as it is currently since March 2005. Similarly, declines in rents over recent years have meant renting has also become more affordable.
Over the past decade, dwelling values in regional WA fell 14 per cent while household incomes increased 25.4 per cent, which led to the big improvement in housing affordability.