A lot has happened in the last few months to give the industry some hope.
Following the outcome of the Federal election, changes to negative gearing and capital gains tax are no longer looming on the horizon, interest rates have fallen and APRA has changed its mortgage serviceability test, making it easier for people to find finance and potentially buy property.
All this has had an effect on the people in the industry and the ANZ/Property Council Survey for the September 2019 quarter suggests they think things are looking up.
Confidence in WA has jumped nine points and is now the second highest of any state or territory.
Property Council WA director Sandra Brewer said the run of four quarters of declining confidence had come to an end, with all the key indicators pointing back in the right direction.
“In addition to the welcome rise in confidence, we have also seen a marked turnaround in expectations for national economic growth, moving from negative territory to be firmly back on positive ground,” Ms Brewer said.
“Falling expectations of Western Australian state economic growth in the June quarter have also rebounded, shooting up to now be the highest of any jurisdiction for the year ahead.
“This is likely driven in large by a complete reversal in industry’s expectations of the availability of debt finance for the year ahead.”
Ms Brewer said the residential sector had seen a much more moderate, but nonetheless important shift in positive expectations for capital growth in house prices in the coming 12 months.
Capital growth expectations has also improved in office market.
What the market thinks:
Reiwa deputy president Lisa Joyce
Reiwa are pleased with the recent announcements made by APRA, RBA and Keystart to help assist people in buying their new home. We don’t expect to see the full effect of these changes until the start of next year, when we would hope to see an increase of buyers that may lead to the beginning of recovery.
For the June 2019 quarter sales activity has declined by 21 per cent since June 2018 however there are positive signs to the median price. Reiwa.com data reveals that the median unit price increased by 3.9 per cent this quarter to $385,000 and the median house price remained stable at $490,000.
While these changes might help nudge the property market in the right direction, what needs to happen for any significant change is an increase of jobs which will encourage people to move to the state.
Master Builders executive director John Gelavis
The opportunity to get the WA housing market moving again has never been greater, so the changes to Keystart income limits, reduction in interest rates and the decision to relax the mortgage serviceability buffer for new loan applicants comes at the perfect time for the industry and those looking to build a home. When you combine this with a $10,000 First Home Owners Grant, stamp duty exemptions, shovel-ready land, competitive market and trade availability it certainly has created a level of enthusiasm within the industry and consumers looking to get their foot on the property ladder.
Master Builders has long recognised the importance of Keystart as a unique pathway to home ownership that has benefits for both buyers and builders in WA, which is why we have been leading the call for the Keystart changes to allow many West Australians to get on the property ladder as well as boosting activity in the new home building sector.
In terms of the broader building and construction industry, more can be done to boost economic growth. Fast tracking major capital works projects in conjunction with the current civil, engineering projects underway and social infrastructure such as education and health facilities will make a big difference to economic confidence and prosperity in WA.
A strong building industry means a strong economy, so we need Federal and State government working together to get these infrastructure projects on the ground and create jobs for WA.
UDIA WA chief executive Tanya Steinbeck
It is certainly encouraging to see that industry’s confidence in the property market is improving given the extended downturn that has been experienced in recent years. Sluggish conditions have continued longer than expected and recent policy changes at a state and federal level to support a market recovery are certainly welcome in order to get things moving.
UDIA expects that the recent changes to Keystart thresholds, APRA’s relaxation of mortgage serviceability requirements, record low interest rates, and the emergence of great value properties available in the new land and established housing markets across Perth will be a catalyst for more positive growth over the next 12 – 18 months.
Now that more people can access suitable finance, we hope to see more buyers moving from the tight rental market into home ownership, taking advantage of current conditions.
It is pleasing to see population growth figures are heading in the right direction, albeit slowly, as more people moving to WA will provide the real boost to demand that we need for the property market moving forward.