If you’ve been watching the Western Australian property market, we have some encouraging news for you. For the first time since September 2023, we’ve seen a welcome improvement in housing affordability, offering a brighter outlook for both aspiring and current homeowners.

A new report from the Real Estate Institute of Australia (REIA) has revealed that conditions in the March 2025 quarter became more favourable for buyers. Let’s break down what this means for you.

Key Takeaway: Your Income Goes Further

The headline news is that the proportion of average family income required to service a mortgage in WA fell by 1.7 percentage points to 40.8%.

What’s behind this positive shift? According to the Real Estate Institute of Western Australia (REIWA), it’s a combination of two key factors:

• Interest Rate Relief: The 0.25% cash rate cut in February provided some relief, directly reducing mortgage repayments.
• Stronger Incomes: The median weekly family income in WA saw a healthy 1.1% increase, rising to $2,709 during the quarter.

Essentially, while property prices have remained strong, the combination of lower interest rates and higher local incomes has eased the pressure on household budgets. And with another rate cut in May, we may see this positive trend continue into the June quarter.

The Bigger Picture: A Balancing Act

It’s important to view this quarterly improvement in the context of the past year. Housing affordability in WA did decline over the last 12 months, primarily due to the remarkable price growth we’ve experienced.

Perth’s median house sale price surged by an incredible 22.0% over the year to March, reaching $775,000. This meant buyers needed to take on larger loans, which naturally impacts long-term affordability. The average new loan in WA is now $594,250, up 14.2% from a year ago.

This highlights the dynamic nature of our market—a tug-of-war between strong value growth and the evolving economic landscape.

WA Leads the Nation in Affordability

One of the most significant takeaways from the report is WA’s standing on the national stage. We have officially retained our title as Australia’s most affordable state for homebuyers.

To put it in perspective, homeowners in WA are dedicating 40.8% of their income to loan repayments, compared to the national average of 48.0%. In New South Wales, the least affordable state, that figure is a staggering 56.8%. This reinforces what we at Holdsworth Real Estate have always known: WA offers incredible value and opportunity.

An Update on the Rental Market

It’s not just buyers who are seeing some relief. The rental market has also seen conditions improve.

The portion of family income needed to meet median rent payments in WA decreased slightly to 24.0%. This improvement is a direct result of more rental supply coming onto the market, which has increased the vacancy rate and eased the intense competition among tenants, leading to more stable rent prices.

What This Means for You

Navigating a changing market can be complex, but these latest figures signal a positive shift.

• For Buyers: The improvement in affordability, driven by rate cuts and income growth, may present the window of opportunity you’ve been waiting for.
• For First Home Buyers: You remain a vital part of the market, accounting for nearly 36% of all new loans. While challenges remain, this affordability news is a step in the right direction.
• For Homeowners: The continued strength in property values demonstrates the resilience and desirability of the WA market, reaffirming the quality of your investment.

Whether you’re looking to buy your first home, find your next one, or simply want to understand what your property is worth in today’s market, our team is here to provide expert guidance.

Contact Holdsworth Real Estate today to discuss how you can make the most of the current conditions.