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Developers address home affordability 29/08/2015

It seems Perth people have something in common with New Yorkers – our median house price is 6.1 times our median household income and we share the same international affordability ranking.

It seems Perth people have something in common with New Yorkers – our median house price is 6.1 times our median household income and we share the same international affordability ranking.

First homebuyers grappling with the vexatious issue of affordability may find it of only some comfort that the time it takes to save a 20 per cent deposit for a Perth home is trending down marginally and some of our other major city counterparts are doing it tougher.

Of more comfort should be the work the development industry is doing to help new homebuyers meet the affordability challenge.

Building a new home in a new development, either greenfield or in urban infill, can still provide an attractive and affordable option with potential for good capital growth in the longer-term.

Developers are competing hard for first homebuyers and working to meet market expectations and deliver the best possible value for money.
For their part, developers must work with local and State Government to prepare them for building efficiently and effectively with all services and infrastructure including parks, landscaping, roads, lighting and more.

In large residential projects there may also be land set aside for schools and shopping centres, medical centres and other facilities developed over time.
Whether it’s a new development on the metropolitan fringe or an old area with ageing infrastructure, servicing can be a serious and expensive challenge.

Nonetheless, developers will seek to provide the kind of building options new homebuyers want, and can afford.  That often means smaller lots that are low-maintenance as well as more affordable.  Increasingly, it may also mean higher density development that comes with the opportunity to provide activated spaces such as retail and hospitality options.

Major residential developments can take many years to complete with infrastructure and facilities developed over time.  Early purchasers are generally rewarded for their patience with lower prices – and greater capital growth over time. 

Unless wages growth significantly outstrips any price growth in the property market, affordability will remain a critical issue for developers, government at all levels and the consumer.  In the short-term, homebuyers may be well advised to review their expectations and set short, medium and long-term goals.


A beautiful home in a new community is still very achievable and history shows purchasers in new estates can not only meet the affordability challenge but reap some great rewards over time.

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