thewest.com.au - 7th August 2009

First home buyers fuel resurgent housing market

First home buyers have restored Perth's housing market after sales slumped to throughout last year, new data has revealed.

According to figures released by the Real Estate Institute of Western Australia today, median sales price grew by 4.6 per cent in the June quarter, lifting by $20,000 on March to $450,000 and in the process restoring the market to its 15 year average.

REIWA president Rob Druitt said the flurry of first home buyer activity in the June quarter has had a significant knock-on effect on trade-up buyers and the overall market.

"The number of first home owner grants paid in the June quarter reached a record high for the nine years it has been in existence, with 4,387 approvals for existing homes and 2,237 approvals for building grants," Mr Druitt said.

"Trade-up buyers generally need a first home buyer to buy their existing home, so they can sell and upgrade. The current demand by first home buyers has therefore resulted in trade-up buyers storming back into the market. This means that an increased number of buyers are now purchasing more expensive properties," he said.

This resulted in sales turnover increasing by 60 per cent on the same time last year, while the number of properties for sale is down by 26 per cent over the same period.

"Perth now has a much better balance between supply and demand with around 12,800 properties for sale at the end of June, down from 15,000 in March, and the number of selling days dropping from 76 in March to 70," Mr Druitt said.

The price of residential land in Perth grew by just over 9 per cent in the quarter, from a median of $220,000 in March to $240,000 in June.

Units and apartments also saw strong growth in the quarter, lifting by almost 9 per cent from a median of $349,000 to $380,000.

Median rents in Perth have remained steady at $360 per week with the vacancy rate stretching out to 3.5 per cent.

In the regions the median house price also grew, lifting by 4.3 per cent to a median of $365,000, while regional unit prices rose to $5,000 to around $320,000.

The price of land in regional WA dropped by 3 per cent to a median of $150,000.

"Presently it looks like Broome, Karratha, Port Hedland and Esperance have all experienced an increase in activity, while Albany saw a modest decline of 3 per cent," Mr Druitt said.

"Karratha has been a real stand-out with 23 per cent growth in the quarter, while Kalgoorlie-Boulder and Geraldton- Greenough grew by 6 per cent. Greater Bunbury is also up 4 per cent and Mandurah-Murray by 3 per cent."