Home buying frenzy before grant cut
There has been a surge of first home buyers in pockets of Perth, with some agents claiming the market had “gone silly” ahead of a cut to the first home-owners grant.
The Master Builders Association accused the State Government of creating a short-term “property bubble” by announcing it would more than halve the grant for established properties from $7000 to $3000 on September 15.
Agents in Victoria Park, Yokine, Maylands, Belmont and Perth say clients had told them that the looming grant changes had motivated them to buy.
Victoria Park agent Derek Baston said the announcement on August 8 had an immediate effect. “The impact has definitely filtered through to the market,” he said. “Since January there has been heightened demand in Vic Park but two weeks ago things started to get silly.”
An example of the surge in buyers was a 75sqm home that drew double the inspections expected, with 37 potential buyers and six offers to buy, he said.
Mr Baston said the trend was putting pressure on prices and he advised buyers to wait until after September 15. “It is a false economy to try to compete in the market before then,” he said.
The Real Estate Institute of WA claims there was no evidence of price rises yet. But president David Airey said higher-than-normal competition for entry-level homes over the next few weeks could send prices up. “What you gain in the grant you may lose on the sale price,” Mr Airey said.
He said the entry-level market was already strong with a $440,000 median, after a $40,000 increase in the year to last month.
MBA housing spokesman Gavan Forster said the coming increase to the first-homebuyers grant for newly built property from $7000 to $10,000 had created a lull.