First Home Buyers in Perth Spending More on Homes for Sale
Recent information from the Western Australian division from the Urban Development Institute of Australia (UDIA) has shown that first home buyers are spending more on their purchases of real estate in Perth.
According to the July data, new buyers are now spending an average of $450,000 on their first home purchases. This is a 7.7 per cent ($32,000) increase from just 12 months ago, possibly indicating that first home buyers are becoming more confident with their purchases.
At the same time, this increased spending could be contributing to the steady rise in median house prices in the city, which have been trending upwards for quite some time.
The RP Data Home Value Index found that Perth real estate experienced a rise of 3.4 per cent during the quarter ending August. This translates into a staggering 14.5 per cent increase year-on-year – the highest rate of growth out of all of the capital cities in the country.
"There are many first home buyers and investors competing in the same sub-$600,000 market, which is forcing prices up," said UDIA WA division Chief Executive Debra Goostrey.
"With mortgage rates of around five per cent, applications for the First Home Owner Grant have increased throughout 2013, despite the rental market vacancy rate lifting from 1.9 to 3.1 per cent over the year."
Changes are on the horizon for the state-provided first home owners grant, which may see the average amount of first home purchases drop due to limited options for buyers.
The grant will be reducing to $3,000 for established dwellings, while increasing to $10,000 for the purchase of construction of brand new houses for sale.
According to Ms Goostrey, the state has seen more than 5,000 applications for the first home owner grant over the year ending July 2013.
"Although established property market listings have increased in recent months, there are still relatively few dwellings priced in the first home buyer and investor range," Ms Goostrey said.
Since the cash rate reductions earlier this year, the level of housing affordability has improved somewhat, however, Ms Goostrey stated there is still room for further improvement.
The Real Estate Institute of Australia reported that the level of income required to pay off a home loan has reduced to its lowest in a decade at 28.7 per cent.
"Housing affordability concerns cannot be tackled unless we get a whole of government commitment to tackling the complex issues of urban development," she said.