WA Housing Affordability Under Pressure as Demand Surges
Housing affordability in Western Australia took a notable hit in the December 2025 quarter, as strong price growth and increased buyer activity pushed ownership costs higher.
According to the Real Estate Institute of Australia Housing Affordability Report, the share of family income required for mortgage repayments rose to 43.5%, marking a sharp quarterly increase.
Suzanne Brown, President of Real Estate Institute of Western Australia, attributed this decline to rising property prices and a surge in first home buyers entering the market through the Federal Government’s 5% deposit scheme.
Property values accelerated toward the end of 2025, with house prices rising 4.5% and unit prices 5.3% over the quarter. Limited housing supply combined with strong demand further intensified competition.
The 5% deposit scheme has made homeownership more accessible, especially for first-time buyers. However, it has also led to larger loan sizes relative to income, increasing financial pressure on households.
Despite the decline, WA remains relatively more affordable compared to other Australian states, though affordability is expected to tighten further in 2026 due to continued price growth and anticipated interest rate hikes.
Buyer Activity on the Rise
Loan activity reflected strong market momentum, with over 10,800 loans issued to owner-occupiers during the quarter. First home buyers accounted for a significant 36.7% of these, highlighting their growing presence in the market.
The average loan size also increased substantially, driven by both rising property values and easier entry through government support schemes.
Rental Market Shows Stability
In contrast, rental affordability showed slight improvement. The proportion of income required for rent dipped marginally to 24.1%, indicating a period of stability after years of rapid rent increases.
While rental prices remain high, slower growth has helped ease pressure on tenants, with only modest changes expected in the coming year.
At Fairstreet Realty, we help you navigate changing market conditions with confidence—whether you’re buying your first home, investing, or renting.
