The number of home loans approved in WA crept up 1 per cent, indicating a strengthening property market in the metropolitan region.
New home loans data from the Australian Bureau of Statistics show the approvals increased to 6846 units in November, up from the 6774 recorded in the previous month.
Debra Goostrey, chief executive of the WA division of the Urban Development Institute of Australia, said while property market activity in the state’s regional areas was mixed, the Perth property market has been strengthening since late 2011.
“The established property market in Perth is experiencing stronger sales volumes, less discounting, quicker sales times, and lower than average listings,” Ms Goostrey said.
“Demand for properties in the sub-$500,000 bracket is particularly strong, driven by both investors looking for high yielding properties and first home buyers taking advantage of declining mortgage rates amid continued rental pressures.”
Ms Goostrey said that with first home buyers absorbing significant levels of established housing stock, upgraders are taking advantage of myriad new dwelling options.
“Throughout 2011/2012 increased sales activity occurred mainly in the sub-$200,000 market, but there are early signs that demand for middle market and premium land is improving in the metro area,” said Ms Goostrey.
According to UDIA’s research, late last year sales of vacant blocks in the $280,000 plus price range in Perth reached its highest level since mid-2007.
Preliminary settlements data show that the median land price in Perth increased 8.3 per cent to $260,000 over the September 2012 quarter.
Meanwhile at a national level, the share of home loans going to first-time buyers has sunk to its lowest level in more than eight years as government subsidies dry up.
The Australian Bureau of Statistics home loans data released on Monday showed the proportion of first home buyer loans fell to 15.8 per cent of all home loans in November, from 18.7 per cent the previous month.
It was the lowest proportion of first home buyers in the market in eight and a half years, according to CommSec.
Overall home loans approvals fell 0.5 per cent in November, the ABS said, well below market expectations of a half per cent rise.
Loans to buy new properties fell 10.3 per cent, while loans to build new homes slipped 1.8 per cent.
Consumer caution and the end of government subsidies in some states have been blamed for the decline.
On a brighter note, loans to buy existing houses edged 0.3 per cent higher, the ABS said.
"Today's data could be a worrying sign that housing demand may be losing some traction after picking up in the earlier part of 2012," St George economist Janu Chan said in a research note.
"Concern about employment prospects and general caution in taking on too much debt may be preventing potential buyers."
Ms Chan said the decline in first home buyer activity was primarily in NSW and Queensland, where the $7,000 state government grant ended on October 1.
St George was expecting the RBA to keep the cash rate unchanged at three per cent in February.
The central bank has delivered 175 basis points worth of interest rate cuts since November 2011 and the cash rate was now at levels not seen since the global financial crisis.
"Given the one-off impact of policy changes and the time lag for previous rate cuts to take effect, we expect the RBA to hold off from cutting rates in coming months," Ms Chan said.
"That said, if the loss of momentum in housing continues, the case supporting another rate cut will build."
CommSec chief economist Craig James, who was also expecting no change to the cash rate in February, noted that the data was for November and the mood was "decidedly more upbeat" in the early weeks of 2013.
JP Morgan economist Tom Kennedy said data showed RBA rate cuts had not given the property market the boost many had hoped for.
"The broad-based weakness is going to continue for a little while longer until the structural changes that are occurring in the economy continue to play out," Mr Kennedy said.
JP Morgan expected the RBA to drop the cash rate to 2.75 per cent in February.
