Lot sales reminiscent of boom times

July 9, 2020English

Lot sales reminiscent of boom times

July 9, 2020
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Weekly land sales in Western Australia recently hit their highest point since the mining construction boom in 2009, according to figures collated by the Real Estate Institute of Western Australia (REIWA).

The numbers, released for the week to June 21, highlight the appetite for new lots on the back of unprecedented State and Federal Government stimulus which entitles certain buyers to grants of as much as $70,000 of benefit when building a new home.

The 412 lots sold in the week to June 21 represented an increase in purchases against the 52-week average for land sales of almost five times, and REIWA President Damian Collins said the demand for land was expected to persist through to the end of the year.

“Land sales were the standout for the week, which saw the highest-level reiwa.com data since August 2009 and can be attributed to the various government homebuilding schemes announced earlier in June,” he said.

“The schemes have certainly helped people who were undecided about a house and land package make their decision quicker, and we will likely see vacant land transactions remain at higher-than-normal levels until the end of the year when the schemes conclude.”

The schemes – the Federal Government’s HomeBuilder grant and the State Government’s Building Bonus initiative – are available to buyers who meet certain criteria through to December 31. HomeBuilder offers $25,000 to eligible buyers – those who earn less than $125,000 per annum as an individual or $200,000 as a couple and whose property value is below $750,000 – provided construction starts on or after June 4 and within three months of the contract date.

There are also allowances for renovations under the HomeBuilder scheme.

The Building Bonus is a $20,000 grant for anyone who builds a new home in Western Australia through to the end of the year, and can also be applied to off-the-plan apartment purchases. Those who qualify for the $10,000 First Home Owner Grant can also still claim it, creating a windfall of nearly $70,000 for first homebuyers who meet the criteria of the three, and when stamp duty exemptions are factored in.

The time and value caveats of the HomeBuilder grant make house and land packages a prime option for those considering a new build. This was reflected in the areas which showed the highest levels of land purchase growth over the week to June 21, which were generally located in the outer suburbs.

reiwa.com data showed the top five suburbs by land sales for the week ending Sunday June 21 were Madora Bay, Baldivis, Maddington, Wellard and Hammond Park, all of which are located in Perth’s outer suburbs.

The strong land sales helped drive the overall property sales market above 1000 sales for the week – the first time it had reached the 1000 sales mark since 2013.

“While things are looking positive for the property market, we hope that recent market activity will not only lead to the recovery we have been waiting for, but will also continue post the government schemes which end on December 31, 2020,” Mr Collins said.

Mr Collins noted those who bought in the outer suburbs in recent years may be at a potential disadvantage compared with those who took advantage of the stimulus.

Source: The West