First homebuyers flock to northern corridor but signs investors are returning

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First homebuyers have been driving the building boom in the northern corridor but there are signs investors are now starting to return to the Perth property market. File picture

FIRST homebuyers have been flocking to the northern corridor from Wanneroo to Two Rocks to take advantage of state and federal government support packages for new residential builds.

But there are signs investors are starting to return to the Perth property market now that the rental moratorium is over.

Writing in the Western Australia residential section of the April month in review report Herron Todd White director Chris Hinchliffe said their valuers were reporting major issues with availability of stock, with significant increase in buyer demand.

“This is evidenced by continued upward pressure on selling prices, with suburbs such as Alkimos seeing a 4 per cent increase in annual growth,’’ he said.

“This may not seem remarkable, but when we consider the huge oversupply of properties in the area pre Covid-19 and years of negative growth rates, we can get a true sense of the demand.

“As with other areas, new builds appear to be the preferred option for first homebuyers in the north.

“Even with a slight upward pressure in prices, the northern fringes market is still within reach for many aspiring to home ownership in a near beach locality.’’

Mr Hinchliffe said with a median house price of $490,000 (at the time of writing his report), Perth was still the most affordable capital city in the country to buy a property and the door remained wide open for first homebuyers, unlike their contemporaries in some cities in the eastern states who were priced out of the market.

Yesterday the Housing Industry Association (HIA) senior economist Nick Ward said nationally first homebuyers had accounted for 41 per cent of new loans issued during the past six months, the highest for more than a decade.

Mr Ward said the wave of first homebuyer activity was due to lower interest rates, government assistance and a reprieve in house price growth in 2020.

“First home buyer activity in the market remains at its highest level since the stimulus associated with the global final crisis (GFC),” he said.

Australian Bureau of Statistics (ABS) data showed the number of loans for the construction of a new dwelling in the three months to March 2021 compared to the same time last year more than tripled in Western Australia (an increase of 261.6 per cent).

But on Monday the Real Estate Institute of Western Australia (REIWA) said Perth’s median price was now above $500,000 for the first time since December 2018 and that listings for rent increased 2.5 per cent during April with 2731 properties available for rent on reiwa.com at the end of the month.
REIWA president Damian Collins said the increase in available rentals was an encouraging sign and only the third time in the last 12 months that listings for rent had increased in Perth.

“Now that the rental moratorium is over, it appears investors are starting to return to the market, which is something we desperately need to help rectify the state’s rental shortage,” he said.
“Although there is still a long way to go, this is a positive trend and one we hope will gather more momentum in the coming months.”

He said reiwa.com data showed 38 suburbs recorded an increase in median house rent price during the month, with the strongest performers being Mount Pleasant (up $30 to $580 per week) and Seville Grove (up $20 to $350 per week).

“Other suburbs to perform well were Wilson, Aveley, Midland, Gosnells, Maddington, Waikiki, Alkimos and Spearwood.”