While things haven’t really slowed down that much for mortgage brokers in Rockingham, Kwinana or Baldivis, the Perth market in general sustained its typical seasonal slowdown in September. While REIWA data does indicate that the median housing price did rise 1% to $544,000 for the quarter, sales were down for the quarter.
According to David Airey, President of REIWA, the rise in the median price happened because there was more activity closer to the inner ring where homes are more expensive and less activity in the outer suburbs where homes are more reasonably priced.
The sales numbers concern Mr Airey. Sales for the September quarter were down by 7% compared to the June quarter and were down 15% from last year’s September quarter.
Seasonal Slowdown or FHOG Slowdown?
While the seasonal slowdown happens every year, due to Father’s Day, the Royal Show and sporting finals, we think changes in the First Home Owner Grant (FHOG) are responsible for spikes in last year’s September quarter and this year’s June Quarter.
On 26 September 2013, the FHOG for established homes went down from $7,000 to $3,000, which is designed to boost the construction industry by encouraging first home buyers to purchase new homes. This meant that anyone who wanted to buy an established home and get a $7,000 FHOG grant has to buy it by 26 September 2013.
On 1 July of this year, the threshold for duty-free transfer of homes for first home buyers was reduced from $500,000 to $430,000. This meant that anyone who was going to buy a home over $430,000 would save more money if they bought before 1 July, causing another spike.
These first home buying spikes, combined with the regular seasonal slowdown, made the September 2014 quarter look worse than it really was.
What it Means to You
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