Home prices skyrocket

PROJECT home prices in WA are rising at a rate not seen for more than a decade, according to figures released by the Australian Bureau of Statistics.

In 1998/99, prices increased by almost 4 per cent in Perth, the highest increase recorded in Australia for the year.

This follows ten years of stable prices despite an increase of almost 20 per cent in building materials prices.

Despite the recent price hike, Perth project home prices have increased only 7.5 per cent compared with an Australian average increase of 14.8 per cent during the 1990s.

However, the sharp increase in project home prices has had no negative impact on demand for new homes.

According to the Australian Bureau of Statistics, WA building approvals for July were at levels not seen since October 1994.

Total dwellings approved grew by 7.7 per cent in the month of July, 24.9 per cent above levels a year ago, and contributed almost $350 million to the local economy.

During July, Gosnells approved 112 houses with a total value of of $9.7 million – the highest number of approvals for the month in Perth.

According to national property group Peet & Co Ltd the approach of the GST and general high levels of affordability is driving the demand.

Peet & Co managing director Warwick Hemsley said there was a

general upward trend in demand for

residential land which was expected to surge just before the GST’s introduction, as people secure a homesite free of extra charges.

Peet & Co monthly sales of homesites for the financial year just ended show a 75 per cent increase over the average figure for the three previous years, Mr Hemsley said.

“Continuing the upward trend, settlements have increased for the past six months to double the average level for the previous three years,”he said.

“The northern suburbs estates of Kinross and Carramar Golf Course Estate are producing sales figures we haven’t seen the like of since 1993/94.”

Established house prices, while not increasing as much as in the eastern states, have still increased 21.4 per cent during the past decade.

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