PERTH'S first home buyers are spending record amounts on their new homes according to new figures.
The Urban Development Institute of Australia WA said first-time buyers spent a record median of $450,000 on their homes in July – up $32,000 compared to 12 months ago.
The under-$600,000 price bracket in Perth has been running scalding hot for the past year or more, leading some to dub WA as having a “two-speed market”.
“There are many first home buyers and investors competing in the same sub-$600K market, which is forcing prices up,” said UDIA WA Division chief executive Debra Goostrey.
Ms Goostrey said there were over 5000 more FHB grant applications made in the 12 months to July compared to a year ago – and nearly twice as many compared to two years ago.
She said the value of dwelling investment finance in WA increased 18.3 per cent in 2012/13 with $1.6 billion more finance taken out during the year.
“Although established property market listings and rental vacancies have increased in recent months, there are still relatively few dwellings priced in the first home buyer and investor range,” Ms Goostrey said.
I do not understand why they give first home buyers money to inflate the second hand house market. I can understand the giving of grants for new builds as it increases supply. Can anyone shed light on the issue Peter from Perth
I do not understand why they give first home buyers money to inflate the second hand house market. I can understand the giving of grants for new builds as it increases supply. Can anyone shed light on the issue Peter from Perth
Don't think of it as a serious attempt to fix the market - think of it as vote buying and it starts to make sense.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
Don't think of it as a serious attempt to fix the market - think of it as vote buying and it starts to make sense.
i don't think the FHBG is a bad thing or that it inflates the market to the degree the grant isn't worthwhile.
the argument that it should be for new builds only is totally bogus, as the only new builds within FHB's means are out on the fringes. it would essentially set them up for a worse fall in the event there is a housing crash as the outer rings fall harder than inner city areas.
established homes in suburbs close the FHB's work etc make a lot more sense for them. i mean for crying out loud, how will FHB's buy an apartment or something else sensible if it's only for new builds? off the plan? you may as well lay some booby traps for them while you are at it.
I am the love child of Tony Abbott and Pauline Hanson
i don't think the FHBG is a bad thing or that it inflates the market to the degree the grant isn't worthwhile.
the argument that it should be for new builds only is totally bogus, as the only new builds within FHB's means are out on the fringes. it would essentially set them up for a worse fall in the event there is a housing crash as the outer rings fall harder than inner city areas.
established homes in suburbs close the FHB's work etc make a lot more sense for them. i mean for crying out loud, how will FHB's buy an apartment or something else sensible if it's only for new builds? off the plan? you may as well lay some booby traps for them while you are at it.
Get the work to the workers. But hey why do that when they will crawl over hot coals to get to work. Peter :pop:
If the work was sent out of the CBD of our cities it would reduce the stress on the workers. Can anyone tell me why a government worker has to work in the CBD of the cities??? I know they don't do any work but hey you know what i am saying. if you had all government work houses say in a ring about 10km from the CBD. It would free up so much infrastructure. If we outsourced the public service to India we would save so much money and get rid of an unproductive cancer that is destroying our economy. Socialist utopia here we come.
I do not understand why they give first home buyers money to inflate the second hand house market. I can understand the giving of grants for new builds as it increases supply. Can anyone shed light on the issue Peter from Perth
The established house market and the new house market are strongly linked. There is a pretty constant premium for new housing over established housing. If new houses get more expensive, established houses will follow. If established houses go up in price, people will be prepared to spend more on new housing.
But if new housing goes up in price, more supply will become available at a lag, which will moderate prices again. If the lag is long enough to allow prices to get ahead of themselves too much, you have a boom/bust.
I'm very skeptical of the value of FHB grants full stop. If you limit them to new builds, it might have the effect of giving developers and their financiers enough confidence to start some builds and reduce the lag between demand and supply, but other than that I can't see much benefit to anyone.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
The established house market and the new house market are strongly linked. There is a pretty constant premium for new housing over established housing. If new houses get more expensive, established houses will follow. If established houses go up in price, people will be prepared to spend more on new housing.
But if new housing goes up in price, more supply will become available at a lag, which will moderate prices again. If the lag is long enough to allow prices to get ahead of themselves too much, you have a boom/bust.
I'm very skeptical of the value of FHB grants full stop. If you limit them to new builds, it might have the effect of giving developers and their financiers enough confidence to start some builds and reduce the lag between demand and supply, but other than that I can't see much benefit to anyone.
the advantage of the grant is that it reduces the statutory entry cost of home ownership, and that really helps in some states.
For example for an FTB in Victoria the stamp duty cost for a $400K home is $9,822 In NSW its $13,490 in WA its $NIL and in Qld its $NIL
If NSW and Vic offered a $7000 grant it would be precisely the same as a $7000 reduction in the stamp duty.
If the stamp duty in Vic was reduced to $2,822 and NSW was reduced to $6,490 absolutely no one would point to a grant as being responsible for any market variations, and yet it would be exactly the same.
In many cases the FHOG is but a convenient scapegoat, when really it's just a discount on the stamp duty.
IMHO if the RBA wants a residential construction boom, they need to get some states to significantly reduce the stamp duty on property transactions for existing homes, and then let the upgraders build.
Any expressed market opinion is my own and is not to be taken as financial advice
IMHO if the RBA wants a residential construction boom, they need to get some states to significantly reduce the stamp duty on property transactions for existing homes, and then let the upgraders build.
i'd build in a heart beat if there was incentive for upgraders. full on mc mansion.
I am the love child of Tony Abbott and Pauline Hanson
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