18/06/2013 - 13:23

First homebuyers cheer low rates

18/06/2013 - 13:23

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First homebuyers cheer low rates

The prevailing gloom in the resources sector has failed to slow first homebuyer activity, with Western Australian recipients of the grant up 22 per cent in May.

Urban Development Institute of Australia WA chief executive Debra Goostrey said there were 34.2 per cent, or 5,384, more applications for the grant over the year to May, and nearly double the amount of applications as two years ago.

“Despite talk of WA’s mining industry coming off the boil, growing numbers of first home buyers are still taking advantage of the historically low interest rates,” Ms Goostrey said.

“For many first home buyers, the cost of servicing a mortgage is similar to or less than what it costs to rent.”

The average first homebuyers’ loan in WA is $315,000, according to the Australian Bureau of statistics.

At five per cent interest, Ms Goostrey said, the average weekly cost of servicing the loan would be $425 – less than Perth’s median rent of $470.

Baldivis attracted the largest number of first homebuyers, the UDIA said, with sales per month up 69 per cent in 2012-13 as compared to 2011-12.

Sales per month in Ellenbrook were up 58 per cent and Byford rose 59 per cent.

“The institute’s research shows an uptick in demand for land since the early May rate cut,” Ms Goostrey said.

“The largest developers in greater Perth sold, on average, 16 per cent more lots in May compared to April.”

The exodus of first homebuyers from the rental market has resulted in a lift in the residential vacancy rate, which rose to an average of 2.7 per cent over the three months to May 31.

The residential vacancy rate averaged around 1.9 per cent over 2012, while 3 per cent is considered to be a normal market, Ms Goostrey said.

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