First homebuyer activity in WA has fallen dramatically following the removal of the federal cash boost in December last year according to a new data.
The latest figures from the Office of State Revenue in WA showed first homeowner grant application numbers for established dwellings in January fell to just 695 and February to 692. These numbers are now equivalent to those of the historic low points of June 2004 (679) and February 2007 (691).
Alan Bourke, president of the Real Estate Institute of Western Australia said the results were concerning and probably suggest that the federal boost pulled forward many first home buyers who might otherwise have waited which means current would-be buyers are fewer in number and will be for a while.
"It also suggests that the recent climb in interest rates has seen some potential first home buyers reconsider and withdraw from the market," Bourke said. "It was unclear how long the lull in first home buyer activity would last, but if it was sustained it may adversely impact on the established housing market. A lack of first home buyers makes it harder for investors and trade-up buyers to sell their existing stock and move on. This situation can create a domino effect and we may see some slow-down in the regular market later in the year if first home buyers are still thin on the ground," he said.
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