First home least affordable in WA

as posted here

26th May 2009, 7:15 WST

WA is the most unaffordable place for first-homebuyers in Australia, with the State’s young couples taking more than four years to save a deposit, according to BankWest research.

Though the property boom is over, the research shows it is still a struggle to get into the first-home market, which has been buoyed by Government grants worth $14,000 to $21,000.

The boost grant will return to normal levels by the end of the year, potentially making it even more difficult for first-homebuyers to get on the property ladder.

The research to be released today shows it takes 4.3 years for couples to save a conservative deposit worth a fifth of the cost of a WA home, which is more than $90,000.

This is based on savings worth 20 per cent of the average pre-tax income for a WA couple aged between 25 to 34, as well as the Government grant.

It compares with a national average saving period of 3.7 years for a home and about three years for a unit.

The Perth area, excluding the regions, is only slightly more affordable than the State as a whole, with couples taking 4.2 years to save a deposit for a home and 3.3 years for a unit.

This is slightly less time than needed to save for deposits for homes in the cities of Sydney (5.2 years) and Melbourne (4.6 years).

BankWest retail head of strategy and products Selina Duncalf said the survey showed homes were now less affordable than they were five years ago.

“Even with the higher level of the first-homeowner grant, it is taking first-time buyers in Western Australia longer to save a home deposit than five years ago,” Ms Duncalf said.

“The fact remains that many young people face years of renting before they can climb on to the property ladder.”

Single first-homebuyers in Perth have an even harder task getting their foot on the property ladder. The research showed it would take 6 1 /2 years for a single person to save a deposit for a unit on their own.

Regional areas were more affordable than the metropolitan area, with 42 per cent of the local government areas in regional WA included in the survey requiring less than two years savings time for a home.

The research showed that couples would have to save the least amount of time to buy a unit in Kwinana (1.4 years), followed by Armadale (1.9 years), Rockingham (2.1 years), Gosnells (2.2 years), Swan (2.5 years), Cambridge (2.5 years) and Wanneroo (2.7 years). The longest savings schedule was needed for units in Cottesloe (9.2 years), Claremont (7 years), Nedlands (5.8 years), East Fremantle (5 years), Subiaco (4.8 years), South Perth (4.4 years) and Melville (4.3 years).

KIM MACDONALD


as posted here