Big fall in first time buyers

[Guest News]

[WRAP]http://i1012.photobucket.com/albums/af245/rob_williams_photo/house-sales.jpg[/WRAP]The first home buyer market has collapsed on the back of rising interest rates and the removal of the Commonwealth grant for first time buyers.

 

New First Home Owner Grant data from the Office of State Revenue show that there were just 988 first home buyers in April, down from 2,322 in April of last year.

 

Real Estate Institute of Western Australia President Alan Bourke said for the month of April the OSR data showed 728 first home buyers purchased an existing home, and 260 decided to build.

 

This compares with the same time last year when 1,555 bought established homes and 767 built new ones

“The effects of six interest rate rises and the collapse in first home buyer activity since January is now evident in all market indicators for Perth and Regional WA,” Mr Bourke said.

 

Mr Bourke said the latest FHOG data for April coupled with reiwa.com sales and listings data confirm the softening trend across many markets.

 

“While FHOG applications for new dwellings have plummeted to just 260, this is in line with the typical long term level over much of the last ten years. The artificial boom of first time buyers triggered by the Commonwealth grant has now well and truly ended,” Mr Bourke said.

 

Overall sales data from the reiwa.com website indicates that sales activity fell by 15 per cent in Perth during April, with preliminary data for May suggesting there has been no improvement to this.

 

“This trend is matched with a steady increase in listings which have risen from 12,700 at the end of March to 13,400 in mid May.

 

“Of the properties for sale, just under 2,000 were for lots of land. There has also been no movement in the rental vacancy rate which was sitting at 4.1 per cent for the three months to April,” Mr Bourke said.

 

It is a similar story in Regional WA, with reiwa.com showing sales falling in Mandurah, Bunbury and Geraldton during April.

 

“Listings have increased in all regional centres, with Mandurah-Murray increasing by 6 per cent over the past six weeks to 1,750 properties.

 

“Bunbury is also up by 6 per cent to 1,300 properties, and listings in Geraldton-Greenough have risen by 20 per cent to 650 properties,” Mr Bourke said.

 

Land for sale in these centres remains healthy with 520 listings in Mandurah-Murray and 275 in both Bunbury and Geraldton-Greenough.

 

The rental vacancy rate in Geraldton-Greenough has increased from 4.8 per cent in the March quarter to 5 per cent in the three months to April, while there has only been a small rise in Mandurah-Murray from 2.6 to 2.7 per cent.

 

In Bunbury however, the vacancy rate has tightened from 3 to 2.7 per cent based on preliminary data for April.

 

“All of REIWA’s broad market measures suggest there is little pressure on prices and the housing system in WA is coping well with current population growth,” Mr Bourke said.