Wage surge fails to ease WA’s housing crisis crunch

3 weeks ago 16

Wages in Western Australia are going up faster than the rest of the nation, but Perth houses remain out of reach as mortgage costs and stamp duty pain a dire picture for aspiring home owners.

The latest Australian Bureau of Statistics data shows WA hourly pay packets rose 3.7 per cent in the year to June – the fastest growth of any state or territory and ahead of the national average of 3.4 per cent.

WA has experienced the most growth in wages nationwide, mostly from the public sector.

The increase was driven by a 5.4 per cent jump in public sector wages – the strongest in the country – while private sector pay lifted 3.2 per cent.

At the same time, exclusive figures from the Real Estate Institute of Western Australia show housing affordability in WA declined in the June quarter, with the proportion of family income needed to meet mortgage repayments climbing to 41.2 per cent. That is 0.4 percentage points higher than March, and 1.6 points more than was needed a year ago.

Affordability improved in all other states and territories in the June quarter.

REIWA president Suzanne Brown said strong demand and rising prices were wiping out the benefits of lower rates.

“As prices rise, people have to borrow more to buy a home and a greater proportion of family income is required to make mortgage repayments,” Brown said.

“The government has relied on stamp duty as a cash cow”

WA’s Shadow Treasurer Sandra Brewer

Tanya Steinbeck – chief executive of the Urban Development Institute of Australia, the peak body representing the development industry – said WA’s strong economy and severe skills shortages were driving up wages in the construction sector.

“Tradespeople in WA are particularly in demand as demand for more housing is very strong,” Steinbeck said.

“Ongoing labour and skills shortages within the residential construction industry has significantly constrained capacity to deliver housing in Western Australia, so attracting people with the right skills to the state is critical to speed up housing delivery.”

She said bricklayers, carpenters, plumbers and electricians were among the trades most acutely short, with bottlenecks also caused by a lack of wall and ceiling trades, concreters and finishing trades.

“House prices have skyrocketed and exemptions aren’t aligned. It’s impossible.”

Henley Brook resident Helen Golisano

Modelling by BuildSkills Australia, the national Jobs and Skills Council for the built environment sector, forecast WA would face the largest construction labour shortfall in the nation over the coming decade.

Steinbeck said the pressure was already being felt.

“Extra costs will impact buyers and push up housing prices, as we have already seen happening over the last couple of years, with the median established house price in Perth now hitting $800,000 and the average cost of a new block of land now approximately $381,000,” she said.

Stamp duty has also emerged as a flashpoint. WA’s shadow treasurer, Liberal Sandra Brewer, said the tax on a median-priced home had almost doubled in less than a decade, from about $18,500 in 2017 to more than $33,000 today.

“Young people, families, and essential workers are struggling. Yet as property prices have increased (and) the government has relied on stamp duty as a cash cow,” Brewer said.

However, Treasurer Rita Saffioti said the government was providing targeted support, including $200 million in relief for first-home buyers, and had lifted exemption and concession thresholds to $500,000 and $700,000 earlier this year.

“The key to addressing housing affordability is to boost housing supply and this is why we have invested an additional $5.8 billion via a broad range of measures including unlocking land supply, boosting our investment in social and affordable housing, increasing the capacity of our construction workforce and supporting first buyers,” Saffioti said.

But with the median house price in Perth now about $780,000, according to REIWA, many buyers are still missing out.

Henley Brook resident Helen Golisano said her daughter and son-in-law bought their first home in Guildford in February for $870,000, but received no stamp duty relief.

“It’s a basic square box home and they get no first-home exemptions. They couldn’t find anything and had to just bite the bullet,” she said.

“House prices have skyrocketed and exemptions aren’t aligned. It’s impossible.”

REIWA data shows first-home buyer numbers have fallen nearly 12 per cent compared with June 2024, but this is expected to expectations that recent interest rate cuts and changes to the Home Guarantee Scheme will improve access later this year.

Brown said first home buyer activity was likely to increase again in the September and December quarters.

“The government has removed the income limits for the scheme, increased price caps and removed the limit on the number of places available,” she said.

“This will make the program accessible to more first home buyers, and we expect to see first home buyer activity increase as a result.”

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