Perth WA - Recent reports suggest that average house prices have increased by at least 10% across Australia over the past year. This has sparked fears of an affordability crisis that could prevent first-time buyers from entering the property market.
However, first-time buyer activity remains strong, according to recent figures. While average prices in central areas of Sydney, Melbourne and Brisbane continue to increase, new housing stock in many residential suburbs remains accessible to first homeowners.
Healthy Residential Supply
Average prices in other major Australian cities have increased at a much lower rate over the 12-month period to the second quarter of this year. In Perth, prices declined by 0.2% in the last quarter.
This steady growth has been paired with a strong increase in residential construction activity. Despite claims of a housing undersupply, no significant increase in rental activity has been observed over the same period.
The proportion of first-time buyers in the purchase of new stock has also increased steadily to 13.2% in June.
Housing Oversupply to Reduce Prices
Continued brownfield development by home builders in residential suburbs, along with the current low interest rates, should maintain the supply of affordable housing for first home owners.
As supply begins to outstrip demand, levels of vacancy increase and property prices drop. This pattern is already being seen in some areas of Western Australia following the winding-down of the recent mining boom.
Parliament Considers Taxes on Foreign Investors
Many property market observers have identified high levels of foreign investment, especially from Chinese investors, as a key factor in increasing house prices. The Government is now considering increasing stamp duty for foreign nationals buying Australian property.
These measures are intended to reduce demand from foreign investors. Proponents hope to limit investor-driven increases in house prices to maintain affordability for domestic buyers, especially first home owners.
However, the Reserve Bank of Australia believes the influence of foreign investors on house prices has been overstated. These investors are primarily purchasing high-value properties in central Sydney, rather than homes aimed at first-time buyers.
Funds generated from sales to foreign nationals may also feed back into further construction of new homes for young Australians.
About First Home Owners Centre
FHOC is the First Home Owners division of HIA award winner Aveling Homes, one of Western Australia’s most quality focused building companies. What this means for you is that above all else, quality and affordability is what you can expect when you choose FHOC.
Visit the FHOC website at http://www.fhoc.com.au for more details about our services and available financing options for first time home buyers. Our financial experts work with you each step of the way to build the home of your dreams.
First Home Owners Centre Contact Information
24/7 Sales Enquiry Line: (08) 6144 1088
Email: [email protected]