30/04/2009 - 00:00

Grant brings first home buyers out in force

30/04/2009 - 00:00

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EARLY analysis of the property market for 2009 is showing signs of revival, as the effects of the increased first homeowners grant, lower interest rates and stamp duty concessions for first homebuyers start filtering through.

Grant brings first home buyers out in force

EARLY analysis of the property market for 2009 is showing signs of revival, as the effects of the increased first homeowners grant, lower interest rates and stamp duty concessions for first homebuyers start filtering through.

First homeowners accounted for more than 40 per cent of all market activity for the March quarter, significantly higher than the normal market share.

The tripling in the first home buyers' grant to $21,000 for new homes, and its doubling to $14,000 for established houses, has been a major driver of activity.

The increased buying has led to the first rise in Perth's median house price in a year.

Data from the Real Estate Institute of Western Australia showed Perth's median house price rose about 2 per cent, or $8,000, for the March quarter to $427,000.

But, the rise has not been uniform across Perth.

Among the most affordable Perth suburbs attractive to many first home buyers, the Armadale-Serpentine region's median price dropped by 2.6 per cent, while the Rockingham-Kwinana region fell by 1.4 per cent.

Gosnells grew by almost 3 per cent, while the north west area of Wanneroo jumped by around 3.6 per cent.

In other areas typically above the median price, southern Joondalup median price grew 2.3 per cent, while Melville jumped 4.6 per cent.

REIWA president Rob Druitt said while increased sales activity was experienced across the whole market, properties priced between $300,000 and $500,000 dominated turnover and made up 57 per cent of all sales.

In the regions, Mandurah's median price held steady at $380,000, despite sales volumes growing 30 per cent on the back of strong first home buyer activity.

In Bunbury, the median price rose 2 per cent to $335,000 despite a greater number of cheaper sales influencing the overall median; while Kalgoorlie's median also lifted by around 2 per cent to reach $326,000.

The average number of selling days for metropolitan Perth is down slightly to 76 in the March quarter, off its peak of 80 days in the September 2008 quarter.

Mr Druitt said the first home buyer boost had a strong impact on the market and has been good for sales.

"We'd like to see the first home owners grant boost continue until end of year, or at the very least phased down so we don't have the falling of a cliff effect," he told a WA Business News property forum.

New figures released by the Office of State Revenue also show a significant lift in the number of first home owner grants taken up since the grant boost was introduced October 2008.

There were 1,868 grants paid in the month of March, with 1,405 for established homes (up 53 per cent on March 2008) and 463 for new homes (up 130 per cent on March 2008).

The median price for first home owner grant recipients has softened since the same time last year.

Overall, the WA median price has dropped 3.6 per cent to $368,000, with the median for Perth metro down 5 per cent to $375,000 and the regional median down 4.2 per cent to $315,000.

The top five suburbs for first home owner grants for the financial year to March 2009 were Ellenbrook, with 261 grants, Butler (236), Baldivis (219), Canning Vale (216) and Clarkson (182).

Mr Druitt said jobs market was critical, with the health of the property market reliant on keeping the state's unemployment rate low.

"The current uplift in the market is very encouraging, but the short and medium term future of the property market will be closely linked to the employment market until we are all able to pull through the global downturn," he said.

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