Tuesday, June 23, 2020

Land Sales Starting to Show in Perth

REIWA has just reported that last week saw a massive increase in land sales. Anecdotally, those that had land to sell reported that their phone was ringing off the hook with developers and potential buyers. Last week there was a 7.7% increase in house sales, 1.8% increase in unit sales and... 58.5% increase in vacant land sales! Availability of rentals are down 44% from last year and 17% lower than a month ago.

Have a look at this graph and come back in a few weeks to see what happened to property sales following the Federal and State Government rebates announced recently.

Source: REIWA and Landgate

Thursday, June 18, 2020

What would the RBA do if they were a first home buyer?

An interesting article came out this morning that said RBA economists were so pessimistic about the housing market in April that they suggested to the federal government to "pause" transactions on existing homes! The expectation is that house prices will drop about 7% in the coming year with a worst case scenario suggesting a drop of 15% in value also a possibility. The article from the ABC can be found here.

So coming back to the topic of buying a home, it seems that the incentives all favour building vs buying an existing home. Doesn't this hurt existing home values even more? If you were to choose between buying and building right now, what situation would one be where they decide to overlook the $45,000 incentive to build? And if you are selling in an area where there are still house and land packages available for sale, why would a buyer buy your house rather than get a $45,000 discount on building?

Friday, June 12, 2020

WA listen up - How to Get $55,000 off your new house?

There's never a better time to build. We've heard that repeatedly over the years but in the last few weeks, this has never been so true. The Federal Government came out with a HomeBuilder stimulus package which gives some $25,000 to build their home. Then the WA government came out with a $20,000 stimulus package which could give some $45,000 to build their new home.

$25,000 - To access Federal Government's HomeBuilder, owner-occupiers must meet the following eligibility criteria:
• you are a natural person (not a company or trust);
• you are aged 18 years or older;
• you are an Australian citizen;
• you meet one of the following two income caps - $125,000 per annum for an individual applicant based on your 2018-19 tax return or later; or $200,000 per annum for a couple based on both 2018-19 tax returns or later;
• you enter into a building contract between 4 June 2020 and 31 December 2020 to either: build a new home as a principal place of residence, where the property value does not exceed $750,000; or substantially renovate your existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of your existing property does not exceed $1.5 million;
• construction must commence within three months of the contract date.

$20,000 - To access the WA Building bonus you need to
  • enter into a contract to build a new home on vacant land or
  • enter into an off-the-plan contract to purchase a new home as part of a single-tier strata scheme.
The contract must be entered into between 4 June 2020 and 31 December 2020.

$10,000 - The First Home Owners Grant in WA gets you another $10,000. Details here.

So who's still in the room buying an existing home? 

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