Where does the state of WA stand?

Last year’s explosive rise in property prices had many Australians feeling housing affordability had spiralled out of reach, though pressure is now easing thanks to the Reserve Bank of Australia’s first interest rate cut in four years.

Yet the sentiment of ‘at least Western Australia is doing better than over east’ has saturated the public conscience, despite only being the third most affordable property market in the country behind the Australian Capital Territory and Northern Territory, according to Real Estate Institute of Australia data.

But beyond the numbers, how exactly does Perth compare to its counterparts and is it really Australia’s El Dorado for real estate?

According to the 2024 Demographia International Housing Affordability report, which rated housing markets using a price-to-income ratio, Australia was categorised as impossibly unaffordable with a median multiple of 9.7 – a considerable leap from 8.2 in 2023.

At the metropolitan level, Sydney was impossibly unaffordable at 13.8 – the second least affordable market internationally – alongside Melbourne (9.8) and Adelaide (9.7).

Perth and Brisbane came in at severely unaffordable, clocking 6.8 and 8.1 respectively.

It is not surprising that Sydney topped the nation’s list, with the highest median house price of $1,437,000 and unit price of $815,000, even though growth was comparatively low.

As the highest-performing market per capita, according to Property Council of Australia WA Executive Director Nicola Brischetto, Melbourne was interestingly the only city with both declining house and unit prices, on top of the second-cheapest median rental rate of $565 despite the highest year-on growth at 8.7 per cent, trailing closely behind Hobart at $500.

While rent in Perth saw a similar surge at 8.3 per cent to $650, REIWA CEO Cath Hart said demand had been self-moderating due to an increase in the size of tenant households, with some choosing to buy instead of rent while others flocked to the family home to avoid rising prices and competition.

Even with its seemingly stellar performance, The Agency Perth Property Partner Jon Wood said Perth was getting close to a point where it was no longer cheap.

“We saw a lot of money filtering in from eastern states rapidly drive prices up – to the point where, from an investment point of view, there aren’t too many opportunities you couldn’t get in other cities,” he said.

Ms Hart said while REIWA was still forecasting price growth, the pace was expected to be lower than 2024, addressing affordability concerns.

“Every housing market is different and price growth changes as local market drivers change,” she said.

“While Perth is the top-performing market at the moment, this will shift at some point.”

This slowing growth could indicate WA may not be the golden property market for much longer.

According to Mr Wood, our state is unique due to having all its economic eggs in the one basket of the mining industry, and when mining goes into a downturn, so does housing.

“We’ve been very lucky resources have been so strong for so long, but inevitably, they will go down,” he said.

Further exacerbating affordability concerns is projected population growth quickly outpacing housing supply.

“To construct our fair share of the National Housing Accord’s 1.2 million new homes by mid-2029, WA needs to build about 6500 homes each quarter,” Ms Brischetto said.

“However, the Australian Bureau of Statistics’ dwelling completion data shows WA built just under 6000 during the September 2024 quarter.

“Perth also needs to dramatically diversify its housing stock and fast.

“It has the lowest level of medium and high-density living with just over eight per cent of homes being either flats or apartments, compared to nearly 18 per cent in Melbourne and more than 34 per cent in Sydney.

“If we’re unable to expand the capacity of WA’s residential construction industry and deliver more medium and high-density living options, homeownership will become increasingly unattainable for young Western Australians.”

As it appeared in the 2025 March 29 edition of The West Australian.