Housing affordability in Western Australia improved marginally in the September 2025 quarter, even as conditions worsened over the year.
According to the latest Real Estate Institute of Australia (REIA) Housing Affordability Report, the proportion of family income devoted to meeting average loan repayments fell to 40.5% in the quarter. This was a decrease of 0.5 percentage points over the quarter, but an increase of 0.6 percentage points over the year.
The WA figures land as national housing affordability sits close to record lows, with recent data showing mortgage serviceability near 45% of household income and many renters spending more than a third of their income on rent.
REIWA President Suzanne Brown (pictured) said the slight improvement in affordability in the September quarter could be attributed to the year’s third interest rate cut in August.
“The Reserve Bank of Australia’s decision in August to lower the official cash rate target to 3.6% helped reduce borrowing costs, and that is reflected in the slight improvement in affordability in Western Australia in the September quarter,” Brown said.
Over the 12 months to the end of September, it has been a different story.
“Australia’s housing affordability has increased by 1.6 percentage points over the year, but this is not true in Western Australia where there has been a decline in affordability over the 12 months to the end of the September quarter. This is due to the strong upward price movement of properties," Brown said.
“As prices rise, people have to borrow more to buy a home and a greater proportion of family income is required to make mortgage repayments.
“Price growth remains very strong in the Western Australian market, and with the December meeting of the Reserve bank keeping interest rates on hold, we expect affordability to be further challenged as we move into 2026.”
Despite the decline in affordability, Western Australia is comparatively attractive for home buyers, with only Tasmania and the two territories being more affordable.
House sales price growth in Western Australia saw a corresponding increase in the size of home loans over the year.
The average Western Australian home loan size increased to $632,901. This was an increase of 2.2% over the quarter and 13.5% over the past year.
Of all the states and territories, average loan sizes increased by the greatest proportion in Western Australia for both first-home buyers (10%) and all owner-occupiers (13.5%) over the 12-month period.
During the September quarter the total number of new loan commitments for all owner-occupiers in Western Australia decreased to 9,796. This was a decrease of 6.9% over the quarter and 3.2% over the past year.
The number of loans to first-home buyers in the state decreased to 3,436. This was a decrease of 6.1% over the September quarter and 7.7% over the past year.
Brown said December quarter figures were likely to see a pick-up in first-home buyer activity.
“These are September quarter figures and pre-date the changes to the Australian government 5% Deposit Scheme,” she said.
“The scheme has increased the pool of qualified first-home buyers and REIWA agents report there is strong activity in this sector of the market as we approach the end of the year.”
Rental affordability in Western Australia declined over the quarter and over the year.
The proportion of family income required to meet median rent increased to 24.2%, an increase of 0.2 percentage points over the quarter and 0.5 percentage points over the year.
Brown said rent price growth had slowed with median rents in Perth hovering around $700 per week.
“After years of very strong growth, rent price growth is slowing,” the REIWA boss said.
Nationally, there has been no change to rental affordability over the quarter, with the proportion of income required to meet the median rent remaining stable at 24.3%. This represents an improvement of 0.5 percentage points over the past 12 months.
Rental affordability declined in Queensland, Tasmania, and the Northern Territory, as well as Western Australia.
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