FIRST homebuyers are increasingly active in the Two Rocks property market but at the same time some Butler homeowners are struggling to pay their mortgages.
Atlantis Beach estate project director Jarrod Rendell said first homebuyers in Two Rocks now accounted for more than 90 per cent of all sales in recent months, with many of the buyers fly-in fly-out families who were more active due to increased activity in the resources sector.
But in a sobering note for homeowners and development in the northern parts of the City of Wanneroo The West Australian reported on Friday, August 31 that Butler was one of the WA postcodes on a national list of postcodes with the highest proportion of people behind at least 30 days on their mortgage repayments.
The Housing Industry Association (HIA) said in July total seasonally adjusted dwelling approvals fell in WA by 14.7 per cent compared with a national 5.2 per cent decline in building approvals.
HIA chief economist Tim Reardon said the housing market had been affected by a slowdown in population growth, constraints on investor finance imposed by state and federal governments and falling house prices.
Mr Reardon said an increase in interest rates charged by banks would accelerate the slowdown in approvals.
But Mr Rendell said in a sign of improving confidence in the WA property market, the average size of a home loan for first homebuyers in the state was at its highest level in nearly two years.
ABS figures for June showed the average size of a first home loan in WA was $321,000 – the highest it had been since November 2016.
He said during the three quarters ending in June the average size of a home loan for first home buyers in Western Australia had rebounded by nearly $25,000.
“Atlantis Beach Estate offers first home buyers the most affordable coastal land in Perth and these astute buyers are now able to secure a coast lot in the estate from just $139,500,’’ he said.
“In particular, we are finding first homebuyers are targeting lots sizes about 450sqm at the estate as they can be purchased for up to $75,000 lower than similar coastal lots closer to Perth.
“We are finding that these first homebuyers are taking advantage of these affordable land prices to build quality homes with the typical total spend for average first home buyers being around $360,000.
“This strong demand from first home buyers at Atlantis Beach has resulted in only 10 lots remaining for sale in our Mulloway release from the original 58 lots.’’
On Thursday, September 6 REA Group chief economist Nerida Conisbee said at a Property Council WA residential property recovery breakfast a strong increase in rental demand and lifts in Perth’s premium suburb prices indicated the WA economy was beginning to turn around.
Ms Conisbee said house prices had dropped by 2.2 per cent during the past 12 months overall they thought Perth was back in the game.
“The problem for Perth has been jobs,’’ she said.
“(But) that’s something that is really turning around.
“Jobs are being created here and they have been growing quite strongly over the past couple years.
“Obviously, the housing market hasn’t fired up, but there’s indications it’s beginning to.
“What we are starting to see is prices in premium Perth suburbs increasing – places like Nedlands, Dalkeith and North Fremantle are seeing more than 15 per cent in price growth.
“When you’re looking at a market that’s in recovery, you look at how the best suburbs are performing – at least initially.”
She said an increase in rental market demand was a direct indication that buyers were returning.
“People don’t typically buy before they move, so an increase in rental demand is an early indication that the buyer is back.
Real Estate Institute of Western Australia (REIWA) said the Perth rental market continued to show promising signs of improvement, with the vacancy rate falling to 4.5 per cent in August – the lowest it had been since April 2015.
REIWA president Hayden Groves said the Perth rental market had shown encouraging signs across all key indicators.
“What we are seeing is a steady yet healthy improvement in tenant activity,” he said.
“Steady rents, easing supply as listings for rent continue to fall and stronger demand with more leasing activity all point to the rental market leading Perth’s property market recovery.”
Leasing activity was up 17 per cent in August, with 4805 dwellings leased during the month.
On September 7 HIA economist Diwa Hopkins said ABS data on housing finance for the month of July showed lending to investors fell by 1.3 per cent with the value of lending now 15.7 per cent lower than in July 2017.
Ms Hopkins said investors exiting the housing market could be traced back to well-documented APRA interventions at the end of 2014 and then again in early 2017.
“In addition, state and federal governments have acted to deter foreign investors by levying additional taxes and charges on their investments in the domestic market.’’