10/10/2012 - 10:34

First timers lead revival in local property market

10/10/2012 - 10:34

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Western Australian property industry bodies say the fourth consecutive month of building approval growth and a burgeoning first homebuyer market are promising signs for the future of the local sector. 

Building approvals rose by 4.7 per cent in August and first homeowner grants for new and established dwellings are at decade-high levels.

A total of 5,280 building approvals were passed between June and August, figures the urban Development Institute of Australia said signalled a return to the levels the state experienced before the introduction of the new Building Act in April.

A UDIA survey of 30 of the state’s largest property developers revealed that residential land sales in the Perth metropolitan and Peel region for the first half of this year were 44.7 per cent higher than the second half of 2011. 

Speaking at a Cedar Woods media briefing last month, REIWA research manager Stuart Darby said he expected building approvals to grow for the next three quarters and projected a 20 per cent rise in dwelling commencements over the 2012-2013 financial year. 

He said first homebuyers were leading the recovery in the property market and attributed the drop in property listings to first homebuyers absorbing housing stocks without replenishing them.

ABS figures for August revealed there were 502 applications for first homeowner grants in new homes, and 1,226 applications for established homes.

Mr Darby said established first homeowners grants were at their highest level since the 2008-09 government stimulus.

UDIA said first homebuyer interest in new dwellings was at a 10-year high, excluding the Australian government’s first homeowners boost between 2008 and 2009.

“Construction is poised to grow strongly in 2012-13,” UDIA WA CEO Debra Goostrey said.

 “The introduction of the Building Act affected building approvals but it hasn’t affected increased interest from buyers.

“Increased loan activity and land sales in 2012 will translate into increased residential construction over the next few months and into 2013.”

She said Perth’s established property market was well into recovery with sales up, prices stable and the number of listings falling steadily since 2010.

 “Combined with strong population growth, a tightening rental market and increased first home buyer activity, sales of new dwellings are strengthening,” Ms Goostrey said.

The only other state to experience an increase in August building approvals was NSW with a 0.7 per cent increase.

WA was the only state to have experienced consecutive growth in building approvals during the past four months, while South Australia fared the worst with a 16-month drop.

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