Housing affordability declined significantly in WA in the December 2025 quarter.
According to the latest Real Estate Institute of Australia (REIA) Housing Affordability Report, the proportion of family income needed to meet loan repayments in WA increased 3.0 percentage points over the quarter to 43.5 per cent.
REIWA President Suzanne Brown said the decline in affordability was a result of strong price growth and increased first home buyer participation due to the Federal Government's 5% deposit scheme.
"After easing earlier in the year, property price growth accelerated towards the end of 2025, with the median house sale price increasing 4.5 per cent over the December quarter, and the median unit sale price increasing 5.3 per cent," she said.
"Growth was driven by lower-than-average new listings and already strong demand, which was boosted by the 5% deposit scheme coming into effect on 1 October.
"This scheme has enabled more buyers enter the market, particularly first home buyers, by reducing upfront barriers to home ownership. However, increased participation by new buyers utilising the scheme has contributed to larger loan sizes relative to income, lifting the proportion of household income required to meet mortgage repayments.
"Unfortunately, we can expect affordability to decline further in 2026, with prices continuing to rise strongly, an interest rate rise in February and March, and more expected over the year."
Housing affordability in WA declined over the year, with the proportion of income needed to meet loan repayments increasing 1.1 percentage points from the December 2024 quarter.
Housing affordability declined in all other states and territories in the December 2025 quarter. WA recorded the largest decline, followed by Queensland with a drop of 2.8 percentage points and South Australia with a 2.5 percentage point decrease.
Despite its large decline, WA remained relatively affordable when compared with many other parts of the country. Only Tasmania, the Northern Territory and the Australian Capital Territory were more affordable for home buyers.
New South Wales was the least affordable state, with 57.3 per cent of family income required to meet mortgage repayments.
Table 1: Proportion of median family income required to meet average loan repayments
| Dec Qtr 2025 | Sep Qtr 2025 | Dec Qtr 2024 | |
| NSW | 57.3% | 55.1% | 59.6% |
| VIC | 44.8% | 43.4% | 46.9% |
| QLD | 51.1% | 48.3% | 49.4% |
| SA | 48.8% | 46.3% | 48.2% |
| WA | 43.5% | 40.5% | 42.4% |
| TAS | 41.3% | 40.1% | 43.4% |
| NT | 33.8% | 32.0% | 34.2% |
| ACT | 32.8% | 31.7% | 36.6% |
| AUS | 49.2% | 47.0% | 49.9% |
Source: Real Estate Institute of Australia (REIA).
Loan activity
There were 10,824 loans to owner occupiers in WA in the December 2025 quarter, an increase of 10.3 per cent over the September quarter and 0.8 per cent higher year on year.
The average loan size was $688,036. This was an 8.7 per cent increase over the quarter and 14.9 per cent over the year.
First home buyers made up 36.7 per cent of owner occupier loans. There were 3,967 loans to first home buyers in the December quarter, a 15.5 per cent increase on the September quarter and 2.9 per cent higher than 12 months ago.
"Despite rising prices over the last few years, first home buyers have remained active in the WA market, but the large jump in the number of loans since the September quarter is very likely to be due to first home buyers taking advantage of the 5% deposit scheme and bringing forward their purchasing plans," Ms Brown said.
The average loan size to first home buyers increased 10.0 per cent over the quarter and 17.3 per cent over the year to $583,716.
"The increase in the size of the loan is likely to be a combination of price growth and the 5% deposit scheme helping first home buyers enter the market," Ms Brown said.
Rental affordability
Rental affordability in WA improved marginally in the December 2025 quarter.
The proportion of family income required to meet rent repayments decreased by 0.1 percentage points to 24.1 per cent. This was also a decrease of 0.1 percentage points compared to the same time in 2024.
"After several years of very strong rent price growth, we are now seeing a period of comparative stability in the rental market," Ms Brown said.
"While rents remain elevated, the rate of growth slowed considerably over 2025 and this has helped keep rental affordability relatively stable over the year.
"While more rent price growth is expected over 2026, the impact on affordability should be fairly small."
Nationally, rental affordability also improved in Victoria, Queensland, and South Australia over the December 2025 quarter. It declined in New South Wales, Tasmania, the Australian Capital Territory and the Northern Territory.
New South Wales remained the least affordable state for tenants, with 27.6 per cent of family income needed to meet rent repayments. The ACT was the most affordable at 18.9 per cent.
Table 2: Proportion of family income required to meet rent repayments
| Dec Qtr 2025 | Sep Qtr 2025 | Dec Qtr 2024 | |
| NSW | 27.6% | 27.2% | 27.9% |
| VIC | 20.4% | 20.7% | 21.5% |
| QLD | 23.4% | 23.6% | 22.9% |
| SA | 25.0% | 25.3% | 25.4% |
| WA | 24.1% | 24.2% | 24.2% |
| TAS | 26.6% | 26.5% | 26.5% |
| NT | 26.1% | 25.4% | 24.2% |
| ACT | 18.9% | 18.4% | 19.1% |
| AUS | 24.3% | 24.2% | 24.6% |
Source: Real Estate Institute of Australia (REIA).
