Perth Australia’s most affordable capital city for home buyers: REIA 20 year report
- Posted By Biljana Trifunoska
Perth remains Australia’s most affordable capital city according to the Real Estate Institute of Australia’s (REIA) latest report, “Real Estate Market Facts: A 20-year report 2002-2022” .
The report found the median house price for Perth increased 75.4% between the June quarters of 2002 and 2022.
It sits at $540,000 for the June 2022 quarter, below Darwin at $586,000, Adelaide at $663,000 and Brisbane at $758,875. Sydney recorded the highest median house price at $1,552,015.
REIWA Chief Executive Offer Cath Hart said Perth had taken a unique journey over 20 years to be Australia’s most affordable capital city in 2022.
“The 20-year analysis revealed the Perth median house price was $307,842 in 2002, increasing 95.4% to $601,613 by 2012. But from 2012 and 2022 the median house price decreased by 10.2% to $540,000, dropping 5.2% in the five years since 2017,” she said.
“Despite the recent increase in activity in Perth, the median house price hasn’t yet reached previous highs, helping the city retain its affordability relative to other capitals.”
Ms Hart said the median price for other dwellings increased 44.1% over the past 20 years but decreased 23.7% over the past 10 years, declining 14.1% in the past five years.
“In 2002 the median price of other dwellings in Perth was $278,210,” she said.
“By 2012 the median price of other dwellings had increased by 88.9% to $525,626. Between 2012 and 2022 the median price of other dwellings decreased by 23.7% to $401,000.”
REIA President Hayden Groves said in real terms Perth was a buyers’ delight when it came to overall housing affordability.
“In June of 2002 the median house price cost was three years and nine months of annual income,” he said.
“By June of 2007 it increased to around seven years of annual income. As of June 2022, it had reduced to a relatively affordable four years and eight months.
“This compares to Sydney at 13 years and six months of annual income. The next most affordable city to Perth was Darwin with five years.”
According to the report, Perth’s median house price to annual income ratio was highest in March 2007 (seven years and four months) and lowest in June 2002 (three years and nine months).
In 2002 the median price for other dwellings was three years and five months of annual income and by June 2022 it had marginally increased to three years six months.
When it came to rental affordability, Perth remained among the most affordable, with five capital cities recording higher median weekly rents.
Ms Hart said the median weekly rent for three-bedroom houses in Perth increased from $283 per week to $460 over the past 20 years and from $229 to $430 for other dwellings.
“The median weekly rent for three-bedroom houses for Perth increased 62.5% between 2002 and 2022,” she said.
“It has increased 20.5% since 2017 but is still 8.4% lower than 10 years ago.
“For other dwellings the median weekly rent increased 87.9% over the two decades since 2002. It has increased 18.0% since 2017 but remains 13.3% lower than in 2012.”
Ms Hart said Perth vacancy rates had fluctuated wildly over the 20-year period, depending on economic conditions.
“Over the past two decades the average vacancy rate in Perth was 3.2%,” she said.
“During the reporting period the vacancy rate was at its lowest in December 2021 at 0.7% and at its highest in June 2017 at 7.3%.
“While the vacancy rate rose marginally in early 2022, it fell back to 0.7% in September and October. This is putting ongoing pressure on prices. It would be good to see the number of rental listings increase so we can return to a healthier vacancy rate of around 3 per cent. Unfortunately, under current economic conditions this is unlikely to happen soon.”