Housing affordability in Western Australia has fallen to its lowest level in 30 years, reflecting the combined impact of rising interest rates and continued property price growth. Despite the challenges facing buyers and renters, WA remains one of the more affordable states in Australia, with ongoing support programs helping many first-home buyers enter the market.

Rising Property Prices and Interest Rates Impact Buyers

The latest housing affordability data shows that the proportion of median family income required to service a home loan in WA increased to 45.9 per cent during the March 2026 quarter. This marks the highest affordability pressure recorded since 1996, surpassing the previous peak reached during the Global Financial Crisis in 2008. Strong buyer demand, limited housing supply, and multiple interest rate increases contributed to higher property values and larger mortgage repayments. Perth’s median house price reached $900,000 during the quarter, while median unit prices climbed to $642,000.

WA Remains Competitive Compared to Other States

Although affordability has declined, Western Australia continues to compare favourably with many other Australian markets. Only Tasmania, the Northern Territory, and the Australian Capital Territory recorded better affordability outcomes for home buyers. New South Wales remained the least affordable state, requiring more than half of a typical family’s income to meet mortgage repayments.

Loan Activity Reflects Ongoing Demand

The number of owner-occupier loans in WA fell during the quarter, largely due to lower property listings and reduced sales volumes. However, the average loan size increased to more than $702,000 as buyers adjusted to higher property prices. Encouragingly, first-home buyers remained active, accounting for nearly 40 per cent of owner-occupier loans. Government initiatives, including the Federal Government’s Help to Buy program and WA’s Keystart scheme, continue to assist buyers in overcoming affordability barriers.

Rental Affordability Also Under Pressure

Renters have also felt the effects of rising housing costs, with rental affordability declining during the March quarter. The proportion of family income required to meet rental payments increased to 24.6 per cent, exceeding previous peaks recorded in 2009 and 2013. Growth in Perth’s median rents, combined with tightening vacancy rates, has placed additional pressure on tenants. Despite these challenges, WA’s rental affordability remains broadly in line with national trends.

Reasons for Optimism in the Market

While affordability remains a significant concern, there are positive signs for the WA property market. The pace of property price growth has begun to moderate, and first-home buyer participation remains resilient. In addition, government assistance programs and future housing supply initiatives are expected to provide greater opportunities for buyers and renters over time. WA’s relative affordability compared to larger eastern states also continues to attract interest from both home buyers and investors.