- New land sales declined by 15% during the June 2021 quarter
- However, they are 60% above the same period in 2019, pre-pandemic
- Urbis Director said interstate migration means land supply will need to increase further
Demand for new land in Perth remains high despite expectations that sales would fall after HomeBuilder and other stimulus measures had been removed, figures from the Urban Development Institute of Australia (UDIA WA) reveal.
UDIA WA CEO, Tanya Steinbeck, said the numbers show that while new land sales declined in Perth by 15% during the June 2021 quarter, they remained 60% above the same sales figures in 2019.
“This is representative of just how healthy the market is now compared to where we were in 2019 following about five years of stagnant market conditions,” Ms Steinbeck said.
“The unprecedented level of sales prompted by the government stimulus measures last year was remarkable and unexpected.
“While that level of demand is unlikely to be equalled anytime soon, we can see that demand is still very strong and we expect that to continue well into next year and beyond.”
Tanya Steinbeck, UDIA WA CEO
During the September 2020 quarter, the new land market reached a five-year peak with 3,500 sales – thanks to the government’s generous grants on offer.
June 2021 quarter saw 1,640 sales, which was well above the 1,047 seen during the March quarter.
“The continued strength in the Perth land market is testament to WA’s strong economic growth, coupled with record low interest rates and accommodative lending criteria, as well as the fact that Perth remains one of the most affordable capital cities in the country,” Ms Steinbeck said.
The price of new land remained steady at $236,122 – just above the five-year rolling average of $232,290.
Although the market is performing well, Ms Steinbeck warned that land supply could become an issue in the coming years.
“While sales figures remain strong, construction activity has dropped off this year as sales numbers have reduced and developers contend with the skills shortage that is impacting WA,” Ms Steinbeck said.
Lots under construction have declined by 8.4%, according to the UDIA’s figures.
“Lower construction rates does raise concerns about how housing supply in the coming years may be affected,” Ms Steinbeck said.
“If developers cannot get the workers they need to get lots on the ground and ready for market, we could see more people struggling to find a home.
High migration to push up demand: Urbis
Urbis Director, Tim Connoley, added that high levels of interstate migration further reiterates the need to increase the level of new lots.
“Interstate migration – despite the hard border – is at the highest level since 2012 and the state government has made it a priority to encourage people to move west as an outcome of the Skills Summit,” Mr Connoley said.
“We expect demand for land to continue steadily into next year and increase further once international borders start to reopen and students, tourists and workers apply to come here.”
Tim Connoley, Urbis Director
“Many Aussies moved back home to WA during 2020. That movement, coupled with positive interstate migration levels has been a key driver for increased demand for housing.”