In­dus­try hope drives con­fi­dence

Canning Gazette - - FRONT PAGE -

WITH sta­tis­tics show­ing a con­tin­ual de­cline in prop­erty prices and more than three in 10 Perth homes sell­ing at a loss, it may come as a sur­prise that con­fi­dence within the prop­erty sec­tor is im­prov­ing.

A lot has hap­pened in the past 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 re­quire­ments, 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 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 had also im­proved in the of­fice mar­ket.

Reiwa is pleased with the re­cent an­nounce­ments made by APRA, RBA and Keystart to help 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.

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.

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 un­der way, and so­cial in­fras­truc­ture such as ed­u­ca­tion and health fa­cil­i­ties, will make a big dif­fer­ence to eco­nomic con­fi­dence and pros­per­ity in WA.

It is cer­tainly en­cour­ag­ing to see in­dus­try’s con­fi­dence in the prop­erty mar­ket is im­prov­ing given the ex­tended down­turn 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.

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