- New lot sales increased by almost 5% during the March quarter
- Year-on-year represents a 31% increase
- The north-east corridor has strongest growth, in part due to METRONET rollout
Despite various stimulus measures such as Homebuilder winding up, new land sales in Perth remain strong, according to the Urban Development Institute of Australia (UDIA WA).
The latest figures show new lot sales increased by almost 5% during the March quarter.
While this quarterly figure is significant, there was a 31% increase in sales year-on-year for the March quarter – 1,927 compared to 1,466 same time last year.
Tanya Steinbeck, UDIA WA CEO, said the new land market remains buoyant despite some initial reservations regarding what would happen once government stimulus was pulled.
“Buyers are clearly making the most of WA’s strong economic position, low unemployment, record low interest rates and accommodative lending conditions,” said Ms Steinbeck.
“At the beginning of last year, the market remained sluggish as the five-year market downturn continued and uncertainty was growing with regard to the potential impact of the pandemic.
“Fast forward 12 months and we are seeing the result of WA’s strong position in managing the spread of the virus and buyers continued faith in property as a solid investment.”
Tanya Steinbeck, UDIA WA CEO
The value of new land continues to remain relatively stable, with the average price of new lots increasing by about 1% over the quarter and 7% over the year.
“Perth remains one of the most affordable capital cities in Australia and that is a major drawcard for investors and those looking at coming to Perth to settle down,” Ms Steinbeck added.
“Construction activity is up 47% on the same time last year. Developers lifted their activity levels significantly following the huge lift in demand prompted by the government stimulus and they are keeping the momentum going this year.”
UDIA research partner and Urbis Director David Cresp said the North East and North West corridors are the strongest growth area, fuelled by the rollout of METRONET.
In 2015, the North East corridor – mostly in or around the City of Swan – accounted for around 20% of sales but has since increased to 28%, making it the strongest selling corridor
“The North East corridor has really opened up and whilst five years ago this corridor was dominated by three key estates today areas such as Brabham, Henley Brook and Bennet Springs are all experiencing strong levels of activity,” said Mr Cresp.
The North West continues to see higher levels of activity, especially in Banksia Grove, Alkimos and Eglinton, the latter of which are maturing as coastal suburbs.
Mr Cresp concluded by remarking that investors are starting to return to the market after an exodus and added more needed to be done to formulate a long term population strategy for WA.
“Record low interest rates coupled with rising prices and rents has begun to entice investors into the residential market to achieve reasonable returns,” he said.
“We need to ensure we are able to maintain economic growth by attracting skilled workers and investors into the state moving forward… a clear strategy that looks at how we are going to maintain population growth following the border closers and impact of COVID-19 is critical.”
David Cresp, UDIA Research Partner