Western Australia recorded its first improvement in housing affordability since the September 2023 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 decreased 1.7 percentage points over the March 2025 quarter to 40.8 per cent.
REIWA President Suzanne Brown said the improvement in affordability was a reflection of the interest rate reduction in February and an increase in the median weekly family income.
"While Perth property prices have continued to increase, this has been offset by the 0.25 percentage point decrease in the cash rate in February, which has seen mortgage repayments decrease," she said.
"At the same time, there has been a small increase in the median weekly income, up 1.1 per cent from $2,675 in the December 2024 quarter to $2,709 in the March 2025 quarter.
"These factors have seen affordability improve."
Ms Brown said housing affordability may improve further in the June quarter, following the 0.25 per cent interest rate cut in May.
Housing affordability in WA declined over the year, with the proportion of income needed to meet loan repayments increasing 2.9 percentage points from the March 2024 quarter.
Ms Brown said the decline in affordability reflected the strong price growth seen over the past 12 months.
"Perth's median house sale price rose 22.0 per cent over the year to March to $775,000," she said.
"People have had to borrow more to purchase a home, which has seen the average mortgage increase, and therefore mortgage repayments increase."
Housing affordability improved across the nation in the March quarter, except in the Northern Territory where it declined 0.5 percentage points to 34.8 per cent.
WA retained its title of Australia's most affordable state, with only the two territories being more affordable.
New South Wales was the least affordable state, where home owners required 56.8 per cent of family income to meet loan repayments, an improvement of 3.0 percentage points on the December 2024 quarter.
Table 1: Proportion of family income to meet average loan repayments
| March Qtr 2025 | Dec Qtr 2024 | Mar Qtr 2024 | |
| NSW | 56.8% | 59.8% | 56.7% |
| VIC | 45.2% | 47.0% | 46.2% |
| QLD | 48.4% | 49.6% | 45.4% |
| SA | 47.7% | 48.4% | 44.4% |
| WA | 40.8% | 42.5% | 37.9% |
| TAS | 43.4% | 43.5% | 42.3% |
| NT | 34.8% | 34.3% | 33.4% |
| ACT | 33.4% | 36.4% | 34.3% |
| AUS | 48.0% | 50.0% | 47.0% |
Source: Real Estate Institute of Australia (REIA).
Loan activity
There were 9,635 new loans to owner occupiers in WA during the March 2025 quarter. This was 9.6 per cent lower than the December quarter but 0.9 per cent higher than the same time last year.
The average loan size for owner occupiers was $594,250, which was a decline of 0.8 per cent over the quarter but 14.2 per cent higher than the March 2024 quarter.
First home buyers made up 35.8 per cent of owner occupier loans. There were 3,446 loans to first home buyers in the March quarter, a 10.5 per cent decline on the December quarter and 9.0 per cent lower than 12 months ago.
The average loan to first home buyers increased 1.9 per cent over the quarter and 11.5 per cent over the year to $506,965.
Rental affordability
Rental affordability also improved in WA over the three months to March.
The proportion of family income required to meet rent repayments decreased 0.3 percentage points to 24.0 per cent. However, this was an increase of 1.0 percentage point compared to the same time last year.
Ms Brown said the quarterly improvement reflected the changed conditions in the rental market, as well as in the increase in the median weekly family income.
"Over the past year we've seen new supply come to the market and the vacancy rate increase," she said.
"This has eased the competition in the rental market and seen median rent price growth slow and prices record periods of stability."
Nationally, rental affordability also improved in New South Wales, Victoria and the ACT, remained stable in South Australia and declined in Queensland, Tasmania 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.
Table 2: Proportion of family income required to meet rent repayments
| Mar Qtr 2025 | Dec Qtr 2024 | Mar Qtr 2024 | |
| NSW | 27.6% | 27.9% | 27.9% |
| VIC | 21.3% | 21.5% | 21.3% |
| QLD | 23.5% | 23.0% | 22.8% |
| SA | 25.4% | 25.4% | 24.8% |
| WA | 24.0% | 24.3% | 23.0% |
| TAS | 26.8% | 26.6% | 27.4% |
| NT | 24.5% | 24.2% | 24.8% |
| ACT | 18.9% | 19.2% | 19.7% |
| AUS | 24.5% | 24.7% | 24.4% |
Source: Real Estate Institute of Australia (REIA).
