Perth's residential land market has joined the established housing sector in the doldrums, with the number of lots sold in the December quarter dropping 27 per cent on the previous corresponding period.
Sales data collected in the Urban Development Institute of Australia and Colliers International's Urban Development Index showed 1,274 lots were sold in the three months to December 31, compared with 1,747 the previous quarter.
The average price of lots fell 2.7 per cent in the December quarter.
UDIA chief executive Debra Goostrey said in comparison to the established housing market, which has seen median values wiped off by 2.3 per cent over the past year, the vacant land market had been relatively steady.
"The land market was holding on for most of the year with sales up in the March and June quarters," Ms Goostrey said.
"But these latest figures show that after six interest rate hikes the RBA has well and truly quashed consumer confidence right across the property market."
Colliers International research manager Samantha Titterington said the lack of consumer confidence did not reflect Western Australia's economic situation, with historically high iron ore prices and export levels, and mining sector employment figures currently sitting higher than pre-GFC levels.
"With falling general eunemployment and massive investment in the resources sector, this downturn in consumer confidence can be correlated to the rapid rises in interest rates and tighter banking sector credit controls," Ms Titterington said.
Ms Goostrey said the UDIA would call on the Reserve Bank to hold back on raising interest rates for at least the next six months.
"The floods in Queensland and potential new federal government levy all add to uncertainty about the Australian economy," she said.
"We need stability from the RBA to ensure people have the confidence to jump back into the property market."
