Desperate first homebuyers in Western Australia have all but given up on the dream of homeownership in the near future, as soaring prices, rising interest rates, and fierce competition create an insurmountable barrier to entry.
Rate Hike Adds to Mounting Pressure
The Reserve Bank of Australia announced a 0.25 percentage point increase in property rates on Tuesday, marking the first hike in two years and signalling more expected rises throughout the year. This development has dealt a fresh blow to young workers across the state, who already feel increasingly distant from the property market.
A Personal Struggle in Leeming
Take Peter Brotherson, a 27-year-old from Leeming in Perth, who exemplifies this growing despair. Despite having a healthy deposit saved and a budget of $750,000, his 12-month search for a home has been fruitless. He has even sold his car to boost his borrowing power, attending inspections with his partner every weekend, only to face one setback after another.
"It's just making it harder and harder to have a chance," Mr Brotherson lamented. "Now it feels like renting might be our only choice, and maybe we'll never own a home."
Deposit Scheme Backfires for Buyers
Compounding the issue, the Federal Government's controversial five per cent deposit scheme, rolled out in October, has inadvertently driven up prices. The initiative has added an average of $100,000 to house values as investors rushed to secure properties before increased competition from first-time buyers.
Quality Fails to Match Soaring Prices
Mr Brotherson also highlighted a disconnect between price and quality, noting that many homes on the market are in poor condition yet command exorbitant prices. "A lot of places are damaged and have rubbish everywhere. The quality of the houses are not reflected by prices," he said. "If you're buying a house that's trashed, but they're still asking for a crazy amount."
Intense Competition at Inspections
The competition at property inspections is another major hurdle. Mr Brotherson reported that most viewings attract dozens of potential buyers, many willing to pay well above the listed price to secure a home immediately. This frenzied environment has forced him to postpone other life goals, such as travelling and starting a family, until he can finally purchase his first home.
Despite a recent jump in loan applications following the deposit scheme's introduction, the overall sentiment among WA's first homebuyers remains bleak. With interest rates on the rise and affordability worsening, many young adults are resigning themselves to a future of renting, questioning if homeownership will ever be within reach.
