First home buyers are keeping the state's housing sector alive with land sales in Perth jumping 29 per cent during the December quarter.
The Urban Development Institute of Australia today released its quarterly sales index which shows a 28.5% increase in sales during the December quarter compared with the September figures.
"First home buyers are keeping the market alive in WA," UDIA chief executive Debra Goostrey said.
"These figures clearly prove what we have been saying - the boost to the First Home Owners Grant announced in mid October has had a positive impact on that sector of the market.
"Given that the quarter includes the very slow start to October prior to the boost, the figures are an outstanding result."
The average price of lots during the quarter was $226,069.
"The average price is down on previous quarters due to the volume of sales occurring at the lower end of the market," Ms Goostrey said.
Most sales occurred in Wanneroo, Swan and Armadale, where the average price is around $220,000.
The cheapest area to buy was Kwinana with an average sale price of $184,687.
Construction activity is also up according to the figures, with a 22% increase in the number of lots
expected to be ready for release in the next 6 to 12 months.
"The increase in construction activity is a good indication of the industry's confidence in the improvement of the market by the end of this year," Ms Goostrey said.
"With the official cash rate down to 3.25% and the possibility of a further cut down the track we should see continued improvement in the market during 2009," Ms Goostrey said.