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GST shouldn’t hurt residential: Fox

THE GST will affect the residential market as it will the commercial and industrial market with upward pressure on prices says Real Estate Institute of WA president Neville Fox.

“It is likely that the local property market will peak during this summer. However the pros-pect of higher inflation associated with the GST should continue to sustain moderate increases in property values,” Mr Fox said.

“The GST will be a major influence on property values in areas with plenty of near new established homes.

“These properties are likely to benefit most from the flow-on effect of the GST,” he said.

“Fortunately, WA will avoid the hangover that some overheated property markets in the eastern States may suffer in the year ahead,” he said.

“In Perth we can look forward to a continuation of the present growth pattern in 2000 – that is a growth rate in the median house price of between 3 and 5 per cent.”

Mr Fox expects new building activity to slow down after the introduction of the GST.

“The GST has brought on higher levels of new home building in the last twelve months, particularly in home unit developments,” he said.

“This may lead to a temporary surplus of home unit numbers in near city areas.

“However, this will be partly offset by the $7,000 first homebuyers’ assistance grant.

“This will boost the housing market at a time when the post GST slowdown was expected,” Mr Fox said.

“With the added benefit of a strong economy we can look forward to another sound real estate year in 2000.”

Stanton Hillier Parker residential project marketing principal Ken Baker shared REIWA’s optimism.

“We expect continuing strong enquiries in the first quarter of 2000 for residential land and inner city apartments.

“Quality inner city apartments ranging from $250,000 to $600,000 will be in demand,” Mr Baker said.

“With the renewal of the north-west resource sector, we also anticipate increased interest in the Perth residential market.

“Developments which will be finished prior to 30 June 2000 will be attractive investments for investors and a large range of quality residential opportunities will emerge in the new year,” he said.

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