Bankwest research shows prices have grown at almost double the rate of wages over the past five years.

The figures released this week show the median house price in the Lower Great Southern had risen 77 per cent, or $171,732, over the past five years, to $394,123.

This compared to a 45 per cent or $11,587 rise in the average income of 25 to 34-year-olds to $37,424 over the same period.

“The mining boom has brought city house prices to the country and this has limited the options for local first-time buyers,” Bankwest managing director Jon Sutton said.

“Prices have fallen by 9 per cent in the Lower Great Southern region in the past year but this has only helped first-time buyers at the margin.”

An area is classified as unaffordable in the Bankwest research if median house prices are more than five times first-time buyers’ incomes.

The results from the Bankwest housing affordability study were derived by analysing house prices by local government area in the Lower Great Southern region and cross-referencing them against average income data for potential first-time buyers.

Data from the research was derived from the Australian Bureau of Statistics Census (2006), the ABS Wage Cost index and house prices from Residex.

Average incomes used in the research were $37,424 for single first-time buyers and $74,848 for first-time buyer couples in the region.

“While five years ago a typical first-time buyer couple could afford to buy across the Lower Great Southern region, now Albany and Denmark are unaffordable,” Mr Sutton said.

“To service the mortgage on a typical home in Albany, a first-time buyer couple would need to set aside nearly half their after-tax income, even taking into account current low interest rates.

“The situation is even tougher for single first-time buyers with five out of seven council areas in the region unaffordable at present.