Stimulus underpins Perth land sales

More than 10,000 new lots were sold during the 2020 calendar year, nearly double the number of sales compared with 2019, according to the Urban Development Institute of Australia.

The latest data compiled for the UDIA WA Urban Development Index, released today, found a total of 10,035 new lots were sold during 2020, up 99 per cent from the 5,284 new lot sales recorded the previous year.  

The bulk of lots were sold during the June and September quarters, according to UDIA WA.

“It is no secret that the Perth residential market headed into 2020 off the back of a five-year downturn,” UDIA WA chief executive Tanya Steinbeck said.

“No one could have predicted the absolutely amazing impact that the federal and state government building stimulus measures would have on the market in early 2020, sparking sales volumes the likes that many developers have never experienced before.”

Sales fell by 43 per cent during the December quarter, to just under 2,000 lots, with the most transactions taking place in the City of Wanneroo and the City of Swan, at an average price of $217,000 and $220,000 per lot respectively.

The City of Swan also achieved the most new lot sales for 2020, with 2,767 lots sold, Wanneroo followed close behind with a total 2,468 lots sold.

The City of Rockingham emerged as the most affordable area for new land, with an average price of $181,000 per lot.

Ms Steinbeck said while new land sales dipped in the December quarter, they remained much higher than the rolling five-year average of 1,579 lot sales per quarter that was recorded between 2015 and 2019. 

“The dip can most likely be attributed to the winding up of the stimulus measures which were only available until December 31, 2020,” Ms Steinbeck said. 

“With timeframes for building commencement also attached to stimulus eligibility, builders were operating at capacity and some had to close their books for a period to ensure they could meet new home builders’ needs in securing the stimulus payments this year.”

Prices throughout the 2020 calendar year remained relatively steady, with the average price of new land in the Perth metro area rounding out the year at $240,650 per lot –  6 per cent higher than the same time last year.

“Perth remains relatively affordable compared with other capital cities and that is good news in attracting more investment into our local market,” Ms Steinbeck said.

“We have an emerging rental crisis in Perth with a sub 1% vacancy rate. 

“We need to do what we can to attract investors into our market to boost the supply of rental stock immediately.”