Perth houses are at their most affordable this century, with first-time buyers in a perfect position to lay claim to their slice of the city.

Figures from the Housing Industry Association show affordability in Perth and across regional WA has improved dramatically, in part because of national efforts to tighten lending standards for investors.

Over the past two years, the required loan repayment on a median-priced house in Perth has fallen by more than $260 a month, or $3120 a year.

For the rest of the State, the required repayment has dropped to $1545 from $1773 a month in late 2015.

Camera Icon Perth house prices are more affordable now than at any other time this century. Credit: WA News

While the drop in prices in Perth and across much of the State has been a key factor, new regulations aimed at calming investor activity in Sydney, Melbourne and Brisbane have delivered a windfall to prospective WA home buyers.

Those regulations, which have forced up mortgage rates on investor loans, have been used by banks to cut rates on owner-occupier mortgages.

HIA WA executive director John Gelavis said another important issue in the WA market was the first-homebuyer’s grant that could be used to qualify for a Keystart loan.

The slowdown in the overall property market had also meant access to tradespeople, and competition among new builders meant prospective buyers were in a particularly strong position.

“What you have is a very competitive building sector, a very competitive market, a lot of options and grants like the first-homebuyer’s all working at the same time,” he said.

While Perth is at its most affordable this century, Sydney is at its least affordable since just before the global financial crisis when homebuyers faced mortgage interest rates of close to 10 per cent.

The figures come as a book to be launched today suggests some of the affordable housing will be in areas closer to the city centre.

Camera Icon File photo Credit: Getty Images

Compiled by the Bankwest Curtin Economics Centre, the book argues an increasing number of people want smaller homes close to public transport and the CBD.

But they face battles with those who want to protect the traditional housing options of many of Perth’s inner suburbs.

“We expect this trend to continue, as more households seek affordable opportunities in central locations, close to quality amenities including transport links,” book editor associated professor Steven Rowley said.

“This requires a change from the traditional model of greenfield development to an increase in medium and higher density options.”