A mid-year fall in the number of new dwellings bought by first homebuyers was one of the first signs of a softening in Western Australia’s housing market in 2007.
Yet while affordability remains a major issue for the industry, initiatives such as the state government’s shared equity scheme are bringing first homebuyers back into the market.
According to figures from the Department of Housing and Works, 746 First Start loans have been approved since the scheme was introduced in February 2007, with a further 622 referred for finance checks.
BGC Residential chief financial officer Anthony Kinder said there was evidence that first homebuyers were returning to the market.
“We’re sensing that the government’s First Start policy is finally getting some traction out there. A few of the developers have realised that if they are going to sell a block of land, they’re going to have to meet the market, as they call it,” he said.
“What that means is consumers who 12 months ago couldn’t buy a house and land package for $420,000 or $450,000 are now able to get into the market. We’re seeing [packages at] $350,000, possibly even lower than that.”
Mr Kinder said BGC’s brands catering to the first homebuyer market, such as Commodore Homes, were suddenly busy after a slow period.
However, he said it would take time to move some of the more expensive stock.
“I think [the increase in first homebuyer activity] will take a while to flow through to the other markets. Once you get into the $500,000 house and land packages that we built as an industry three or four years ago – those things are just sitting idle in retail terms. There’s a lot on the market,” Mr Kinder said.
Housing Industry Association executive director John Dastlik said that, while first homebuyer activity in the new housing market had slumped since its peak in mid-2005, there were signs of improvement.
The First Start scheme, administered by the Department of Housing and Works under Keystart, has a budget of $300 million.
