Source: The Real Estate Conversation
While there are concerns over property tax on foreign residential property investors slowing economic recovery, recent data shows that first home buyers are more active than ever in Perth, WA, after subdued buyer activity.
First home buyers in the Perth property market are active, with data for the March 2018 quarter revealing an increase in the sales for properties priced $500,000 and below.
Real Estate Institute of Western Australia (REIWA) President, Hayden Groves, said that after observing subdued first home buyer activity during the December 2017 quarter, it was exciting to see the lower end of the market pick up again.
“The final quarter of 2017 saw the composition of the Perth market shift. Last quarter, there were significantly more sales in the higher priced end of the market and less in the first home buyer price range. It’s been a different story this quarter, with the balance of sales shifting back to the lower end of the market,” Mr Groves said.
Increased activity in the lower end of the market is usually a sign that first home buyers are active, according to Mr Groves.
“We are incredibly fortunate that the dream of home ownership is more attainable for West Australians than it is on the east coast. After seeing activity drop off last quarter, it’s good to see first home buyers are increasing their presence in the market,” he said.
Meanwhile, the near-doubling of a new tax on foreign residential property investors in Western Australia has been slammed by property experts who fear it will slow down economic recovery in the region.
The recent budget increased residential foreign buyer tax from four to seven per cent, in a bid to raise $123m in revenue.
Mr Groves described it as a “blow to the property market” that would deter much needed investment in the state.
While there are fears the increase in property tax will ‘stifle’ foreign investment in the region, the increase in first home buyer activity in the cheaper market is encouraging.
We spoke to Mr Groves earlier in the year, who told WILLIAMS MEDIA investor activity isn’t where it should be.
“We’re over-supplied with units at present with investor activity soft due to above-average vacancy rates and investors cautious about capital growth potential for the apartment sector.
“Investors are likely to remain cautious until they see tangible growth,” he said.