Perth is the major Australian city which still has homes with a backyard near the beach available for $350,000.
Among the state capitals, the city has the cheapest median house price of $578,751 making it far much more affordable than Sydney ($1.417million), Melbourne ($1.001million), Brisbane ($880,332), Adelaide ($676,546) and Hobart ($793,723), CoreLogic data for April showed.
The suburb of Balcatta, just 15km north of central Perth, has a mid-point house price of $589,957, making it a typical suburb in the WA capital.
But villas are even more affordable with a two-bedroom one with a small courtyard on the market for $335,000.
Perth still has homes with a backyard near the beach available for less than $350,000 (pictured is Cottesloe Beach)
Living by the beach is also affordable in Perth with a two-bedroom apartment at Scarborough, 16km north-west of the city centre, available for $399,000.
Perth’s median unit price in April was $409,747 – less than half Sydney’s $830,534.
An Australian with an average, full-time salary of $90,917 can also afford a house near the beach without being in mortgage stress – the threshold where they are owing the bank more than six times their salary before tax.
While Karrinyup, 14km north of the city, has an expensive median house price of $1.025million, a two-bedroom duplex house is on the market for $599,000.
With a 20 per cent deposit factored in, an average, full-time worker on that $90,917 salary would owe the bank $479,200 for a debt-to-income ratio of 5.2.
That is below the Australian Prudential Regulation Authority’s stress threshold, which is 6.0.
But Perth had Australia’s weakest capital city growth of 6.9 per cent in the year to April, which was well below the capital city median increase of 16.8 per cent.
While house prices peaked in 2014, after the mining boom, WA has the strongest labour market.
Australia’s jobless rate in April has fallen to just 3.9 per cent – the lowest since 1974 – but the situation is even better in Western Australia, where the level is 2.9 per cent.
The suburb of Balcatta, just 15km north of central Perth, has a mid-point house price of $589,957, making it a typical suburb in the WA capital. But villas are even more affordable with a two-bedroom one (pictured) with a small courtyard on the market for $335,000
Australia’s lowest unemployment rate
WESTERN AUSTRALIA: 2.9 per cent
AUSTRALIAN CAPITAL TERRITORY: 3.1 per cent
NEW SOUTH WALES: 3.5 per cent
TASMANIA: 3.8 per cent
NORTHERN TERRITORY: 4.1 per cent
VICTORIA: 4.2 per cent
QUEENSLAND: 4.5 per cent
SOUTH AUSTRALIA: 4.5 per cent
Source: Australian Bureau of Statistics labour force data for April
While that’s the lowest in Australia, for WA that is only the lowest since October 2008.
With a population of 2.1million people, Perth is home to 80 per cent of the mining-rich state’s population, making WA’s ultra low unemployment reflective of the capital.
Borrowers taking out a home loan need to be mindful of the Reserve Bank of Australia raising interest rates several more times in 2022 and 2023.
The Commonwealth Bank on Friday became the last of the Big Four banks to pass on in full the RBA’s 0.25 percentage point rate increase on May 3, ending the era of the record-low 0.1 per cent cash rate.
Westpac chief economist Bill Evans is expecting the RBA to raise interest rates by 0.4 percentage points in June, taking the cash rate to 0.75 per cent from 0.35 per cent.
That is despite the wage price index in the year to March growing by just 2.4 per cent – less than half the inflation rate of 5.1 per cent, the fastest pace in 21 years.
‘We do not see the slightly lower than expected WPI for the March quarter as being a swing factor in its decision on June 7,’ Mr Evans said.
‘We still expect the RBA to raise the cash rate by 40 basis points in June 7.
Living by the beach is also affordable in Perth with a two-bedroom apartment at Scarborough, 16km north-west of the city centre, available for $399,000
‘The inflation challenge and the actions of other central banks are emphasising that the RBA is well “behind the curve” and needs to catch up.’
Westpac is expecting the RBA cash rate to hit 2.25 per cent by May next year, which would see monthly repayments on a typical $600,000 mortgage rise by $713 to $3,019, compared with early May before the rate rise.
‘This, in turn, is expected to see an earlier and sharper correction for dwelling prices,’ it said.
Australia’s second largest bank is expecting national property prices to fall by two per cent in 2022, followed by another eight per cent in 2023 and one per cent in 2024.
While Karrinyup, 14km north of the city, has an expensive median house price of $1.025million, a two-bedroom duplex house is on the market for $599,000
How YOUR mortgage repayments could surge under a 2.25 per cent cash rate
$500,000: Monthly repayments rising by $594 from $1,922 to $2,516
$600,000: Monthly repayments rising by $713 from $2,306 to $3,019
$700,000: Monthly repayments rising by $831 from $2,691 to $3,522
$800,000: Monthly repayments rising by $951 from $3,075 to $4,026
$900,000: Monthly repayments rising by $1,070 from $3,459 to $4,529
$1,000,000: Monthly repayments rising by $1,189 from $3,843 to $5,032
Calculations based on variable mortgage rates rising from 2.29 to 4.44 per cent in line with the cash rate increasing by 2.15 percentage points from a record-low of 0.1 per cent to 2.25 per cent