Western Australia faces a housing affordability catastrophe that could see the average Perth home costing a staggering $2.3 million by 2046, according to alarming new projections that reveal the growing impossibility of home ownership for future generations.
The Stark Reality of Future Housing Costs
Recent analysis based on historical growth patterns paints a disturbing picture for aspiring homeowners. Property prices in Perth have been increasing at an average rate of 5.8% annually since 1990, a trend that would push the median house price from today's $718,000 to an unimaginable $2.3 million within just 22 years.
Even more concerning is the projection for units, which would leap from their current median of $450,000 to approximately $1.4 million by 2046 if current growth rates continue unchecked. These figures emerge from data compiled by the Real Estate Institute of Western Australia and analysis by property research firm Propell.
Who Will Be Able to Afford a Home?
The affordability crisis extends far beyond simple price increases. Household incomes would need to reach $430,000 annually to comfortably service a mortgage on a median-priced home at these projected prices, assuming standard lending criteria and interest rates.
This represents a dramatic leap from current requirements, where households need approximately $135,000 to afford today's median-priced home. The widening gap between wage growth and property price appreciation threatens to lock out all but the wealthiest Australians from home ownership.
Propell National head of research and property economics Linda Phillips warns that without intervention, Australia risks creating a permanent divide between property haves and have-nots. "If prices continue to grow at the rate they have, we're going to have a society of people who can't afford to buy a home," she stated.
Potential Solutions and Market Interventions
Experts point to several potential strategies to address the looming crisis. Increasing housing supply through strategic land release and planning reforms represents one critical approach to moderating price growth.
Other measures under consideration include:
- Encouraging higher-density living in well-located areas
- Implementing policies that support first-home buyers
- Reviewing tax settings that influence property investment
- Promoting construction industry efficiency to reduce building costs
The Western Australian government has acknowledged the challenge, with Premier Roger Cook recently announcing plans to accelerate housing construction and streamline approval processes. However, whether these measures will be sufficient to alter the long-term trajectory remains uncertain.
As Phillips notes, the historical data suggests that even significant market corrections provide only temporary relief. "The long-term trend is very strongly up," she observes, pointing to the consistent growth pattern across multiple economic cycles.
The projections serve as a stark warning to policymakers and the community alike. Without coordinated action to address housing affordability, the Australian dream of home ownership may become inaccessible to most Western Australians within a single generation.
