CCIWA Chief Economist
More people are squeezing into WA homes to help manage rising mortgage, rent and cost of living strains. The average WA household has also depleted their savings by 20% and plans to rein back spending by 13%, according to the latest Chamber of Commerce and Industry WA (CCIWA) Consumer Confidence Survey.
Amid the tightest rental and housing conditions in more than a decade, our survey shows one in four (26%) Western Australians are looking at living with more people to help them manage costs. A striking one third of WA homeowners with a mortgage (32%) reported seeking or considering more housemates, a similar proportion as renters (31%). One in ten respondents (9%) said they had already responded to higher costs by adding more housemates. That’s a step too far for those who have already paid off a mortgage, among whom 2% recently added a housemate, and 80% report no interest in considering it.
Results show WA’s housing stock can be used much more efficiently. More than three quarters (77%) of respondents had at least one vacant bedroom, with an average of 1.6 unused bedrooms per home. Rental homes are the most efficiently used, with 1.2 empty bedrooms compared to 1.9 in family homes.
Meanwhile two in three WA households (65%) are planning to reduce their spending in the face of rising costs. Western Australians nominated consumer goods like electronics and clothing (65%), cafes and restaurants (64%), homewares and renovations (58%) and groceries (57%) as areas for reduced expenditure. The withdrawal of spending across all areas was expected to be 13%.
More than half (52%) of the respondents to CCIWA’s survey said they had needed to draw down on savings in the past six months. WA households have depleted their reserves by an average of 20%, and by nearly a third among young people (32%).
Turning to the economy, one in six (17%) WA households anticipate better economic conditions in the next three months, while one in three (35%) expect the economy to worsen. Seven in 10 Western Australians (72%) identify interest rates as reducing their confidence, twice the proportion since the RBA began hiking rates. Four in five (80%) said higher living costs had reduced their confidence. Omitting the worst quarter of the COVID pandemic, this puts WA confidence at around a six-year low.
Stamp duty is a critical barrier to the efficient use of WA’s housing stock. It impedes first home buyers, impedes asset regeneration, and impedes workers from shifting closer to preferred schools, workplaces or the regions. It is twice as punishing to young and lower-income people, who are likely to move more often in life, consuming a higher proportion of their income. CCIWA encourages the State Government to abolish and replace stamp duty, and to continue their welcome efforts to encourage urban infill.
CCIWA Consumer Confidence Reports are available to CCIWA members