Perth housing affordability on the rise

Perth housing affordability on the rise

There hasn’t been a better time in recent years to become a first home buyer, or invest in a property in Perth, according to the latest research from market analysts.

There hasn’t been a better time in recent years to become a first home buyer, or invest in a property in Perth, according to the latest research from market analysts.

Housing affordability in Perth is on the rise and the good news is, with the right plan, you can speed up the time it might take to make an offer on your dream home, or new build!

Perth forecast promising
According to recent figures from the Housing Industry Association, the “Perth market rates as the most affordable capital city market in the country” following four years of declining housing prices.

“…Prospective buyers will not be able to resist the value proposition much longer,” the report said.

Moody’s Analytics agrees, forecasting that Perth house values will drop slightly in 2018 and 2019, before making a slow recovery in 2020.

Market beginning to stabilise
The CoreLogic-Moody’s Analytics Australia Home Value Index Forecasts found that the Perth market is starting to stabilise, thanks in part to rebounding commodity prices which are encouraging income growth.

While the median household income for Perth had increased by 3.7 per cent during the past five years, the median dwelling price had only jumped by 1.1 per cent, the report said.

Steady annual population growth of about 1 per cent in Perth was another positive contributor.

Where does that leave house prices?
The CoreLogic-Moody’s Analytics report concluded that while the Perth housing market was not expected to recover until 2020, home values would not reach 2015 peaks during the report’s forecast period.

This is fantastic news for first home buyers because in the greater Perth region, house prices are predicted to drop by 1.9 per cent in 2018 and 0.5 per cent in 2018, but are expected to increase by 1.4 per cent in 2020. 

And, according to the HIA, Perth scored 113.5 on its annual affordability index, signalling a 5.1 per cent jump compared to last year.

To put this number in perspective, a score of 100 on the index equates to an affordable market where mortgage repayments make up 30 per cent of earnings under current market conditions. The average score across all Australian capital cities for this year was 72.9!

Plan ahead with these smart tips
If you are thinking about building, or investing in your first home this year, keep the following tips in mind*:
  • Do your research
  • Get to know the market
  • Be realistic about where you want to buy and your budget
  • Draw up a list of ‘must-haves’ and ‘nice-to-haves’ for your ideal property
  • Talk to the experts such as real estate agents and mortgage brokers
  • Get your finances in order. This includes knowing your credit score and having your latest tax return on file as these may affect how much you can borrow
  • Organise pre-approved finance early
 
To find out how My First by Pindan Homes can help you get into the property market as a first home buyer, visit www.pindanhomes.com.au/myfirst
Source: Pindan Homes