After food and water, housing is the core ingredient for a successful life and yet despite its importance, satisfying that requirement is becoming increasingly difficult for many households, both in terms of basic affordability and the ongoing adequacy of supply at lower price points. In this respect, affordable housing refers to dwellings which households on low-to-moderate incomes can afford, while meeting other essential living costs. Over the past 30 years, Western Australia has experienced a growing decline in housing affordability. In addition, the past decade has seen the cheaper entry-level housing relied on by low income households effectively removed from the market. High demand and increasing expenditure on home renovations nationally1, coupled with the closing gap between the prices of low cost Perth apartments versus houses2, has resulted in reduced opportunities at the lower price points more than ever before.

Even during the high economic growth of the last decade, increases in property prices have consistently outstripped the rise in incomes. In May 2000, a family in Perth on the median income of $40,700 p.a. could buy a home for 3.9 times their annual income, whereas in September 2010 the same family on the median income of $73,300 p.a. needed at least 6.5 times their annual income to purchase a similar property. Affordable housing, as measured by the Housing Loan Affordability Indicator, has now declined to the point where average home loan repayments are now 40% less affordable (in trend terms) than they were in 1980.

Apart from providing shelter, for most people affordable housing is the foundation for life’s opportunities and a doorway to success. But many Western Australian households are finding this goal difficult to secure, with the problem most acute amongst those on low-to-moderate incomes groups.