WA lags in national property turnaround
THE national property market is continuing to recover off the back of an increase in new home sales, but Western Australia is lagging behind the rest of the nation, according to new industry data.
A survey by the Housing Industry Association found new home sales increased nationally for the fourth month in a row during the month of April, however in Western Australia new home sales fell by 4 per cent.
Despite the fall in April, the HIA survey indicated a modest turnaround in WA's new home building conditions over the first four months of the year driven by the first homebuyer market.
Perth was also the only capital city to record a fall in property values during the first four months of 2009.
The RPData/Rismark Australian Home Value Index revealed Perth's median house price dropped 0.8 per cent over the first four months to April, compared to a national rise of 2.8 per cent over the same period.
The report indicated house values in the Perth market fell by 1 per cent during the first four months of the year, while residential units showed growth of 0.1 per cent during the period.
Australian Bureau of Statistics data, released on Tuesday, indicated that building approvals for private homes rose by 6.3 per cent in WA, compared with a 7.2 per cent increase nationally.
Industry analysts Commsec said the national results indicated the much anticipated recovery in the building sector was taking hold and would help to support growth over the rest of 2009.
Housing Industry Association (WA) executive director John Dastlik said he was not concerned by the 4 per cent drop in new home sales in WA for the month of April.
"Considering that we've gone up about 25 per cent in the past five or six months I think it's more important to look at the trend over [that period], where we're continuing to see an upward cycle, or an upward trend in the number of home sales that are occurring," Mr Dastlik said.
Mr Dastlik said new home sales results had been skewed by a lack of available land and the cyclical downturn of the housing industry following the real estate boom.
"I think we're still following the problems that we had during the course of the boom and the tailing off from it in terms of we had problems in getting enough land onto the market," he said.
"Our new home sales started to turn way back last August/September when the first interest rate drops started to occur.
"When the boost in market activity came as a result of the federal government's stimulus packages we still had a bit of a lag coming from the lack of available land and appropriately priced land in the market place.
"We're actually now really starting to pick up in terms of new sales coming through.
"In more recent times developers have had a bit more time to get their production online and start to develop more of the land that was appropriately priced for first homebuyers."
Mr Dastlik was encouraged by the increase in building approvals in Western Australia, which indicated the property market had bottomed-out and was recovering, thanks largely to first homebuyer activity.
"We've started to see a turnaround in the number of building approvals coming through the marketplace over the past two or three months," Mr Dastlik told WA Business News.
"We have been at the bottom of the cycle, understanding that building approvals lag quite some time after the sale's been made, so these sales for these building approvals were probably made four or five months ago.
"We're now starting to see the impacts of the first homeowners boost coming through the marketplace in official statistics such as building approvals."
Commsec said the lift in building approvals was encouraging and low interest rates and tight rental markets should lead to solid homebuilding over the coming year.