Price stability drives demand

DEMAND for new homes in Perth remains strong despite the recent interest rate rise and changes to the Federal Government’s first homebuyer’s scheme, according to Housing Industry Association executive officer John Dastlik.

The new home market was being driven by affordability and price stability, he said.

“The cost of the average new home has increased by only 3 per cent [over the past 12 months],” Mr Dastlik said.

“Demand for new homes is strong and the market very competitive.”

HIA statistics indicated that home starts for this year should peak at 19,000, dropping in 2002-2003 by about 12 per cent to between 16,000 and 17,000. The 2001-2002 financial year is the cyclical peak of the new home market’s typical two-year cycle, Mr Dastlik said.

He said the rising market for homebuilders was in renovations and additions which, based on value, was growing at 6 per cent compared with the new home market’s 2 per cent growth.

Mr Dastlik said small husband and wife building companies were the main beneficiaries of the increase in the home alteration and additions market.

These results contrasted with established home values, which increased by 12.1 per cent over the past financial year, according to statistics from the Real Estate Institute of WA.

Homebuyers in the established home market continue to outnumber home sellers in the quarter ending June 2002.

During the 2000-2001 financial year, WA’s top five builders of new home-start contracts were BGC Housing, Webb & Brown-Neaves Pty Ltd/Dale Alcock Home Improvements, J-Corp Pty Ltd, Content Living Home Builders Pty Ltd and Ventura Homes.

Although figures for 2001-2002 will not be available until the end of Sept-ember, building approvals from local government authorities indicate that BGC Housing has been overtaken by Webb & Brown-Neaves Pty Ltd/Dale Alcock Home Improvements for top spot. The list then reads BGC Housing, J-Corp Pty Ltd, Scott Park The Home Builder and Ross North Homes.

Webb & Brown-Neaves general manager Alan Even said the new home market was fairly bullish across all sectors, from $80,000 first home buyers to $400,000 executive residences.

He said there was a good level of enquiry and that the rise in interest rates had not been sufficient to hurt buyers.