WA: Housing affordability falls and
'will get worse'
Courtney Trenwith
Housing affordability in WA has
declined and is likely to only
worsen this year, according to
research by the real estate
industry.Housing affordability in WA
fell 1.2 percentage points in the
March quarter, with WA and the
Northern Territory the only areas to
go backwards, a Real Estate
Institute of Australia report shows.
The proportion of family income
required to meet home loan
repayments in WA is now 24.1 per
cent, the report says. It is
marginally better than a year ago.
The average loan in WA increased to
$305,800 - about 2.5 per higher than
in the December quarter and 2.1 per
cent up on the March quarter last
year. Fewer new loans were committed
to, down 0.6 per cent to 12,018,
although that was 10 per cent more
than the same time last year.
Australian Bureau of Statistics
figures released today show the
number of finance commitments fell
even further in April, down 1.2 per
cent. Real Estate Institute of WA
deputy president Ian Cornell said
housing affordability in WA was
expected to worsen this year because
of a
dramatic decline in new home
building approvals.
Building approvals plummeted by 46.7
per cent in April, according to the
ABS, prompting emergency meetings
between the government and industry.
The slump has been attributed to the
state's new Building Act, which came
into play on April 2 and has caused
confusion among developers and local
government authorities in charge of
approvals, drastically slowing down
the process.
"If this persists for a few more
months we will see a fall in new
dwelling starts for both the June
and September quarters," Mr Cornell
said. "This will ultimately lead to
a supply imbalance that will, in
turn, put pressure on established
housing. The knock-on effect will
ripple through the existing
residential housing market and put
price pressure on both buyers and
renters for the latter half of 2012.
"Ultimately, this means that the
increased competition for houses and
rental properties on the market will
push up the prices for both as we
move into spring." Housing Industry
Association WA director John Dastlik
said without quick reforms the
downturn in building approvals would
have long-term effects. He was
confident blockages in the approvals
process could be resolved soon. If
so, the number of new dwellings
would not be affected but they would
be delayed.
"Sales in the new home market are
actually increasing, [but] we've got
a piece of legislation which has
slowed the approvals process," Mr
Dastlik said. "If you continue to
have very slow processes ... that
can have an impact on people's
decision on whether they go new or
established. So in the medium- to
long-term, if these sorts of issues
expand the time on which to get
building permits and people have to
rent longer, they might make the
easier decision [to buy an
established home]. "That would cause
the established housing prices to go
up. "We need to make sure we don't
have artificial impacts on housing
prices in WA or rental availability
and rates. You need to keep the new
housing market going so we replenish
the stock and increase the stock to
make it more affordable."
According to REIWA, the number of
homes for sale has significantly
declined in the past year, from
about 18,000 to 12,975 this week. At
the same time, the number of sales
has slowly increased, creating a
tighter buyer's market. Mr Cornell
said renters were facing even
greater affordability pressures.
"The proportion of income required
to meet the median rent in Perth
grew by 0.7 per cent in the March
quarter and now stands at almost 21
per cent," he said. Mr Cornell said
higher rents were encouraging more
first home buyers, with the number
increasing by 4.1 per in the
quarter, a significant increase of
36.4 per cent on March last year.
The REIA Housing Affordability
Report found 3910 people bought
their first home in WA during the
first three months of this year.
However, Mr Cornell said it was
concerning that the average loan to
first home buyers was up almost 3
per cent to $287,800 or by 6.5 per
cent on the same time last year. WA
was the only state where average
loans to first home buyers increased
during the quarter.
Crisis accommodation's
crisis
Opposition housing spokesman Peter
Tinley said more vulnerable people
and families were turning to crisis
accommodation, which was struggling
to cope. "My office has been
contacted regularly by people who
had sought emergency housing
assistance and sadly we have found
that increasingly, there is no
available crisis accommodation," Mr
Tinley said. "The whole point of
crisis accommodation is to assist
people in crisis, who literally have
nowhere else to go.
"I received an email last weekend in
relation to a woman with two young
children who was trying to escape
domestic violence but was unable to
find emergency crisis accommodation
for her family.
"Social welfare agencies would
attest it is extremely difficult to
tell people seeking assistance that
there is no help available because
services are full."
Moreover, he said creeping housing
affordability was no longer only
affecting vulnerable families, but
working families were increasingly
becoming the face of WA's homeless
population. "WA is experiencing a
housing affordability crisis and
many working families are simply
unable to afford increased rents,"
he said.
He said the government's recently
announced 10-bed shelter for
homeless men fell far short of what
is required to address the crisis.
Housing Minister Troy Buswell and
Commerce Minister Simon O'Brien, who
was instrumental in the new Building
Act, have been contacted for
comment. (source:
http://www.domain.com.au/ )
Fears housing affordability crisis
brewing across WA
Posted June 21, 2012
14:19:32
The Western Australian Opposition says the State
Government needs to take action to solve a housing
affordability crisis, with more than 50,000
residents on the Homeswest waiting list. Labor's
housing spokesman, Peter Tinley, says people who
could once afford private rentals or their own home
are now being forced to turn to public housing due
to rising costs. He says there are more than 2,200
people on the waiting list in the mid-west and
Gascoyne, more than 3,000 people in the wheatbelt,
more than 2,600 people in the south-west, more than
1,500 in the Great Southern and more than 1,700 in
the Pilbara.
Mr Tinley has accused the Minister for Housing, Troy
Buswell, of not doing enough to solve the problem.
"Because there's such a housing shortage, rents are
just through the roof, so there's no opportunity for
these people who are working ... what I would call
the working poor ... who have no capacity to
actually get into the private rental [market], let
alone home ownership," he said.
"It's just becoming too difficult. "The Government
needs to be very serious about funding public
housing correctly and not wasting money. "Population
in Western Australia is not decreasing, it won't be
a feature of our future. We'll be an increasing
population all over the place. "We need to take that
seriously and fund properly the expectation that
people have for looking after some of the most
vulnerable people in our community."
Mr Buswell says there are only about 23,000 people
registered on the public housing waiting list as at
May 2012, which is fewer than last year. He says the
Government is continuing work on its State
Affordable Housing Strategy, which aims to deliver
at least 20,000 new Homeswest homes by 2020.
Mr Buswell says the Government has constructed more
than 3,000 new public housing dwellings in
three-and-a-half years. (source ABC News)