Kim Macdonald: Perth’s battlers are doing it four times tougher than most in the housing market

The cheapest house sold in Perth last week — a $530,000 three-bedroom home in Gosnells — and it is a far cry from the price paid for Perth’s most affordable house a year ago. In the same week last year, Perth’s cheapest house was $362,500, an amount which purchased a three-bedroom home on an 800sqm block on Tankerton Way, Coodanup. There has been much hand-wringing over a 20 per cent price hike across Greater Perth’s housing market over the past year, but the price differential between these two homes suggests housing inflation has been twice as bad for Perth’s most vulnerable buyers. (And twice as good for investors.) And Perth’s housing inflation only gets worse the further back we look. In the same week in 2022, the cheapest home was $235,000, which paid for a three-bedroom, two-bathroom home on a 810sqm block on Tomlinson Place in Armadale. In the same week in 2021, Perth’s cheapest house was a four-bedroom house in Junee Place, Armadale, which cost $216,000. Go back to the same week in 2020 and the cheapest house was in three-bedroom home on 783sqm of land in Malu Court in Camillo, which sold for $175,000. Only one year earlier than that, in 2019, the cheapest house was $155,000 — a three-bedroom home on an 812sqm block in Fairlie Place, Coodanup. That means the cost of Perth’s cheapest house — typically a three bedroom home in Perth’s outter suburbs — has jumped 242 per cent in just five years. Housing inflation facing Perth’s battlers is about four times worse than what most buyers have experienced in the same time frame, with REIWA data showing the median house cost increasing 56 per cent in that same period. The pain felt among battlers is even more acute when you consider many are buying for the first time, and don’t have the benefit of hundreds of thousands in capital gains from the sale of other homes. Many of these cheaper houses were purchased by east coast investors, and while they have no doubt added some useful supply to the rental market, the spike in demand has made it almost impossible for battlers to own their own homes. How can they, when a 20 per cent deposit for the required home loan is a six-figure sum? And if they do get on the ladder, how will they cope with repayments, when at current interest rates, they will likely pay as much in interest over 25 years as they will for the principal? There have been just as many losers in this boom as there has been winners. And both levels of government should heed these battlers, because there is nothing like the death of the Great Australian Dream to rile voter anger. Just as Howard’s battlers were won over by the introduction of first home buyers grants in the late Nineties, the same cohort will be rushing to polling booths.