Land buyers have been flocking to Perth, and it’s easy to understand why. Besides being a place where sunsets can be enjoyed by the beach (unlike in the eastern states), Perth has a lot going for it – including its controlled COVID-19 situation and value-for-money land deals.
Data from the Urban Development Institute of Australia (UDIA WA) released in August showed Perth achieved 3,322 new lot sales during the June quarter, a 126% increase in sales and the most the institute had ever recorded.
“The state and federal government home building stimulus measures have clearly had a significant
impact on the Perth market,” Ms Steinbeck said.
“Despite significant economic impacts across the country and indeed the globe, the Perth market is
holding strong and providing fantastic opportunities for new home buyers.”
Despite the flurry of activity, prices have remained relatively stable, rising by 0.8% over the quarter; and in other good news for buyers, Ms Steinbeck doesn’t anticipate any supply issues on the horizon.
“We saw a flurry of buyers hit the market when the stimulus measures were first announced and this initial influx has settled down somewhat,” Ms Steinbeck said.
“UDIA WA’s survey shows that there are approximately 7,500 new lots either on the market or under construction. This is more than enough to meet demand as long as we can get approvals and titles issued in a timely manner.”
The quarter’s strong results were backed up in July. Data from REIWA, Western Australia’s real estate institute, showed both dwelling and land sales were up 68% since April’s pandemic induced lull.
What Perth suburbs are performing best?
It’s Perth’s north eastern suburbs that have been most popular for new builds, with the suburbs of Vale, Ellenbrook and Brabham scoring the top spots for sales activity during the June quarter, according to data from UDIA WA.
All located in the City of Swan, the region saw 1,000 blocks sold between April and June at an average price of $228,000.
The next most popular region was the City of Wanneroo, which saw 800 lot sales at an average price of $215,000.
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However, when it comes to apartments it appears to be Perth’s inner-city suburbs that are most popular with buyers.
A recent survey from Urbis/Urban Development Institute of Australia revealed inner city suburbs East Perth, Perth, South Perth and Applecross to be most popular with apartment buyers, with South Perth and Applecross also making the list for the top 10 suburbs to buy an established home.
Urbis director of economics David Cresp told Australian Property Investor Magazine that the results weren’t surprising due to the convenience of the top performing suburbs.
“They are areas that are highly accessible to employment hubs and the CBD, and they are areas that have got a high amount of natural open space, cafes and restaurants,” he said.
“They are very high amenity locations and close to public transport. That list does make a lot of sense, yes that’s where the supply is, but the supply is there because that’s where people are buying.”
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What Perth property investors need to know
Following the WA state government’s announcement of a $20,000 grant for property investors engaging in a new build, Property Club Western Australia branch manager Troy Gunasekera warned property investors to think critically about where they choose to buy.
Mr Gunasekera told Smart Property Investment that investors could be chasing “fool’s gold if they did not undertake careful research before making a decision to buy a property in Western Australia.”
Among his tips, Mr Gunasekera warned property investors to avoid mining towns and to look at the long-term infrastructure before making a decision.
“New infrastructure can play an important role in driving future capital growth of an area. For example, property investors should look at new capital expenditure planned by state government in Western Australia on transport. This includes new train links and road to outer suburbs, making commuting time faster to employment hubs,” he said.
Mr Gunasekera also commented on Perth’s rental market, encouraging investors to be smart about location despite the current demand for rentals.
“The rental market in Perth is now running hot with very low vacancy rates. However, like capital growth rates, well-informed investors will achieve above-average rental returns if they choose the location of their investment property carefully,” he said.
Can I move to Perth from interstate?
Western Australia’s borders have been closed since Sunday 5 April, making it difficult to move to Perth from interstate.
Although border exemptions do apply, moving to a new house from interstate is not a listed exemption, though requests can be made and applied for on a case by case basis. To read the full list of exemption criteria to see if you apply in other ways visit the WA State Government website.
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What stimulus incentives are available for Perth buyers?
Depending on your situation, Perth property buyers might have access to a variety of stimulus incentives and grants, with options for first home buyers, investors and owner-occupiers.
$25,000 HomeBuilder Grant
Available until the end of the year, the HomeBuilder grant supports both those renovating their current home as well as those building a new home to live in. Recipients must meet eligibility criteria.
First Home Loan Deposit Scheme
Also available until the end of the year (or until places run out) the First Home Loan Deposit Scheme (FHLDS) effectively allows the government to act as guarantor to get first home buyers into the property market sooner without the standard 20% deposit. To discuss the scheme or to secure a place on the waiting list book an appointment with an eChoice Home Loan Expert.
$10,000 First Home Owner Grant (FHOG) WA
In Western Australia the FHOG is a one-off $10,000 payment designed to assist first home buyers in buying or building a new residential property to use as their principal place of residence.
Find out more: Your guide to the First Home Owner Grant WA
$20,000 Building Bonus Scheme (WA)
The $20,000 Building Bonus scheme began in June this year and will end on 31 December 2020. Designed for both owner-occupiers and investors, you do not need to be living in WA to claim the grant and it is designed for those building a new home on vacant land. The grant can be stacked with other schemes. Find out more here.
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Words by Kathryn Lee
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