According to a recent survey, property in Perth is the cheapest than in any other capital city, taking nearly a third of the average price of Sydney property.
Data collected by Property Club through a survey has discovered Perth is the capital city that offers the most affordable property.
Troy Gunasekera, Property Club state manager for WA, said the ratio of yearly full-time earnings for adults in Western Australia compared to the median price for houses in Perth is at 5.4.
“In comparison, it now takes 14.2 times the full-time annual salary for someone living in New South Wales to buy a house in Sydney which is nearly three times the ratio for Perth at 5.4,” Mr Gunaskera.
“Melbourne is the second least affordable city to buy a home with an annual salary to house price ratio of 10.0 followed by Canberra 6.8, Brisbane at 6.3, Darwin and Hobart, 5.8, Adelaide, 5.7, and Perth the most affordable at 5.4.
“Property prices in Perth are now the most affordable because property values here have been declining over the past three years, with the value of most properties in Perth now the same as they were a decade ago.”
Hobart in recent times has experienced a rise in median house prices of 13.6 per cent, showing how suddenly affordable changing can turn.
“The median house price in Hobart surged by 13.6 per cent over the past year compared to a 2.8 per cent decline in Perth. This is despite the fact that Perth has around 10 times the population of Hobart,” Mr Gunasekera said.
Furthermore, Western Australia is in what Mr Gunasekera calls a “jobs bonanza” with more than 44,000 jobs created over the last year to September 2017.
“This full-time job creation is very important because it means that there will be a significant amount of additional expenditure flowing through the state economy,” he said.
“This has helped drive down the unemployment rate in WA from 6.4 per cent to 5.6 per cent over the past year. WA’s unemployment rate is now second lowest of any state in Australia and only slightly higher than New South Wales at 4.8 per cent.”
Mr Gunsasekera recommended buying in a subdued market, like Perth is currently, and like Sydney and Melbourne during the mid-2000s; these areas achieved substantial capital growth due to booms in the long term.
Not all of WA is fail-safe however, as Mr Gunasekera claims Perth’s inner city has a large oversupply of properties, and will continue to do so for a while yet, which will impact negatively on property prices.