Land sales in Perth have surged to a record high as new home buyers take up government subsidies designed to keep the construction industry afloat during the coronavirus crisis.
New statistics compiled by the Urban Development Institute of Australia Western Australia show a 30-year record was set with the highest ever number of blocks sold in the June quarter.
The UDIA WA statistics show there were 3322 new lots sold in the June quarter compared with 1999 the previous quarter, heralding a 126% increase in land sales across the state.
The survey found the average price of lots sold in the period was $226,400 and the average block size was 371sqm.
The data, which has been collected since 1990, is based on surveys of Perth’s major land developers.
The City of Swan in Perth’s eastern suburbs was the most popular for land sales, with more than 1000 blocks sold in the period, while the City of Wanneroo, in Perth’s north, recorded 800 transactions.
Government stimuli has given buyers the push
UDIA WA chief executive, Tanya Steinbeck, said the boom in land sales had been fuelled by state and federal government home building stimulus offerings.
“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,” Ms Steinbeck said.
“While demand has surged, average prices for new land have remained relatively steady at $226,400,” she said. “Comparative to other capital cities in Australia, Perth remains an affordable and stable option for those looking to enter the market.
“New land prices have risen just 0.8% over the quarter and 2% since the same time last year.”
In June, the WA Government announced $20,000 grants on the back of the $25,000 HomeBuilder grant from the Federal Government for owner-occupiers who build or substantially renovate their homes.
West Australians embarking on new home projects can now potentially access up to $45,000 in grants as well as other concessions.
The WA Government also expanded the 75% off-the-plan transfer duty rebate, capped at $25,000, to include purchases in multi-tiered developments already under construction in addition to pre-construction contracts.
Contracts must be entered into between 4 June and 31 December 2020.
The WA market has shown resilience during COVID-19
Nerida Conisbee, chief economist at realestate.com.au, said the West Australian property market had shown considerable strength during COVID, with a considerable amount of activity among first-home buyers.
“Perth is showing a lot of positivity at the moment,” Ms Conisbee said. “House and land, in particular, seem to be the most popular new development type nationally, but Perth in particular.
“The big driver is first-home buyers. When we look at Perth, we’ve seen more than a quadrupling of enquiries coming through from first-home buyers. Perth is actually the strongest market at the moment in terms of what we’re seeing in terms of growth.
“As well, WA provides one of the most generous first home buyer incentives in Australia at the moment… and first-home buyers would be a key part of the market driving that.”
New home builders are striving to meet demand
Satterley chief executive, Nigel Satterley, said the company had hastened the release of several new stages of developments to help meet demand.
“The generous government grants have had a dramatic effect on sales and our estate managers have been extremely busy trying to keep up with all the enquiries,” Mr Satterley said.
“We have brought forward stages in many of our developments to be able to keep up with the demand.
“These grants are so important in ensuring job certainty for all the trades that contribute to housing construction and to ensure the WA economy can keep growing during the pandemic.”
Ms Steinbeck said the tight timeframes in which stimulus packages are available had caused a rush of potential buyers.
“The industry has had to ramp up quickly to meet such an influx in demand,” she said.
“We saw a flurry of buyers hit the market when the stimulus measures were first announced and this initial influx has settled down somewhat.
“UDIA WA’s survey shows that there are approximately 7500 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.”