WA gloomy on property outlook

31/07/2009 - 13:45

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Western Australians are a negative lot compared to the rest of the nation with nearly half responding to a home finance survey believing their property values will decline in the next quarter.

WA gloomy on property outlook

Western Australians are a negative lot compared to the rest of the nation with nearly half responding to a home finance survey believing their property values will decline in the next quarter.

 

The announcement is below:

 

A national housing and finance survey has found that West Australians are under increasing financial pressure, according to Phil Naylor, CEO of the Mortgage & Finance Association of Australia (MFAA).

"While WA experienced the full extent of the recent economic boom, it seems it is also bearing the brunt of the downturn," Mr Naylor said.

The Bankwest/Mortgage & Finance Association of Australia (MFAA) Home Finance Index survey of 974 people found that respondents from WA felt gloomier across a range of indicators including:

- Falling Home Values: On average 24.4 per cent of respondents thought that the value of their residential property had fallen over the last 12 months. Among WA respondents, this figure increased to 46 per cent, compared to 15.4 per cent in Victoria and 23.6 per cent in NSW.

- House Price Expectations: Nationwide 36.2 per cent of respondents thought the value of their residential property would be lower over the next quarter. This compares to a figure of 44.6 per cent in WA.

- Times have changed: While 68.9 per cent of WA respondents felt that property prices would increase over the next quarter when asked in November 2007, this figure has now fallen to 22.8 per cent.

- Loan Repayments: WA respondents have now fallen into line with other states when it comes to ease of making loan repayments. 16.7 per cent of respondents from WA said they were struggling to make loan repayments, compared to 2.1 per cent in November 2008.

- Good time to buy: Perhaps in response to weakening market conditions, WA respondents were most likely (63.3 per cent) to agree that now is a good time to buy a new home. This figure compares to 38.5 per cent in Queensland and 45 per cent in South Australia.

Head of Mortgages at BankWest, Paul Vivian, said while respondents from WA were more likely to be negative in sentiment, they were also more optimistic on the question of whether it was a good time to purchase a new home.

"These results suggest that once negative sentiment subsides, there will be scope for stronger growth in the residential sector," Mr Vivian said.

Mr Naylor said that the national survey demonstrated that Australia's economy is undergoing significant changes.

"The survey suggests Australia is experiencing reversal in the economic cycle which has specific implications for WA. Economic expectations are certainly less bullish that only 12 months ago," Mr Naylor concluded.

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