PROPERTY developer Nigel Satterley wants the state to temporarily cut stamp duty rates and boost the first homeowners’ grant to kick-start the wallowing residential property market.
PROPERTY developer Nigel Satterley wants the state to temporarily cut stamp duty rates and boost the first homeowners’ grant to kick-start the wallowing residential property market.
Mr Satterley suggested the state government increase the first homeowners’ boost from $7,000 to $15,000 on new and established homes up to the value of $650,000 for six months.
The property developer also wants to see a 12-month amnesty on all residential stamp duty on homes valued up to $650,000, and reduction by half on the stamp duty for homes sold between $650,000 and $1 million for six months.
“My plea to the state government is to cut stamp duty and increase the first homeowners’ grant, even for a limited time, to give the property market the spark it needs for a resurgence,” Mr Satterley said.
The head of the state’s biggest land development company believes the market is more than a year away from recovery, with a further 5 per cent fall in prices expected before a slow improvement starting around September 2012.
Speaking ahead of a WA Business News Success & Leadership event this week, Mr Satterley said buyers had their hands in their pockets because the housing had become unaffordable, and supply overhanging the market would continue until sellers acknowledged they had to lower their prices.
Mr Satterley also noted that the long-term market would be changed by tighter lending restrictions and simply would not return to the levels that some other observers were suggesting.
He was highly critical of a recent BIS Shrapnel report suggesting Perth housing would grow at 6 per cent a year for the next three years.
BIS reportedly forecast the median house price would rise from about $480,000, 10 per cent below its 2007 peak, to $570,000 in the middle of 2014.
But, ever the salesman, Mr Satterley said there was plenty of upside given the state’s population growth, adding that Perth was the best buyers’ market he had seen in 40 years in the industry.
Offering a significant amount of market analysis, Mr Satterley said there were 23,000 properties for sale between Yanchep and Mandurah at the moment, more than 60 per cent above the 14,000 available properties that represented a balanced market.
He said the total number of homes sold in the metropolitan area and Mandurah in the year to March was 28,700, a drop of about 30 per cent compared to the previous corresponding period when sales were 41,000.
“It sounds like shock and horror but it’s not,” Mr Satterley told WA Business News.
“There has been a progressive price correction bringing us into that balance I mentioned a moment ago.
“The fall in the median house price has not been a market crash. It has been a slow but steady 1.4 per cent decline each quarter over two years.
“Over those two years the median has gradually come down from $515,000 to $465,000.”
Mr Satterley said residential land development had undergone a sharper decline with lots sold slumping more than 40 per cent to 7,955 for the year March, compared to 14,412 in the previous 12 months.
That’s a decrease of more than 40 per cent.
“Those statistics confirm that the market is very soft,” he said.
“I am hopeful it may be close to bottoming out. When that happens there’ll be a long period of stability and growth and the homebuyer will benefit.
Mr Satterley said there had been a major structural change in the traditional Australian home buying culture, with Generation Y unprepared to save money and move out of home, lowering demand at the first homebuyer end of the market.
“Consumers are reluctant to take the plunge on major spending and there is a log-jam of people with their existing homes on the market so they can trade up,” he said.
“Sixty-seven per cent of potential buyers already own a home. They want to upgrade but they are trapped in the slow lane. They can neither sell, nor can they trade up.”
Mr Satterley added that the costs involved in buying a new or even established home are a big barrier to buyers.
“Potential new home buyers are faced with another costly problem. I refer to the very high changeover costs, which can be as much as $36,000 including agent’s fees, removalists, stamp duty and so on,” he said.
“The builders say that when a new house is being built councils charge like a wounded bull.
“And the approvals process is still taking far too long.”
