Western Australia remains one of the most affordable places to buy property in the country. While first home buyers around the country are increasingly priced out of the market, the dream of home ownership is still very achievable for most West Australians.
The Real Estate Institute of Australia (REIA) released their Real Estate Market Facts report last month which showed that during the March 2022 quarter, Perth had the most affordable median house sale price of any capital city in the country at $525,750.
How Perth stacks up to the other capital cities
To put our affordability into context, REIWA calculated how long it would take for Perths median house sale price to catch up to the current median prices in other capital cities at an annual growth rate of five per cent.
The analysis showed it would take 23 years for Perths median house sale price to catch Sydneys $1.59 million median, it would take 18 years to catch Melbournes $1.22 million median, 13 years to catch Canberras $982,000 median, 10 years to catch Hobarts $820,000 median and eight years to catch Brisbanes $760,000 median.
Stamp duty remains a key issue
Even though we are the most affordable state and have the highest proportion of first home buyers in our owner-occupier market of any state or territory in the country, more needs to be done to ensure first home buyers remain an active component of our local market.
It is well known that stamp duty is one of the biggest financial imposts placed on first home buyers when trying to save for a home. For most first home buyers, servicing a loan is manageable, it is the upfront cost of a deposit and stamp duty (which equates to an extra $20,000 on top of the deposit for a median priced home in Perth) that presents the biggest challenge.
One way to ease this burden would be to ensure the duty-free thresholds and concessional rates for first home buyers are reflective of where the market is at. The Perth median house sale price has experienced strong price growth over the last couple of years, which is why the First Home Owner Rate duty-free threshold should be lifted from $430,000 to $530,000, to reflect where the market is at.
This would help more West Australians buy their first home and free up some much-needed rental stock.