Property slump Australia

Perth property market: Sweeteners on offer as developers chase buyers in soft market

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Despite the sluggish market, a new report found Perth has the second-most expensive residential land in the nation.

The report by the Housing Industry Association and CoreLogic said Perth's land cost $730 per square metre, which was cheaper than Sydney ($1,051) but more expensive than Melbourne ($677).

Perth residential land sales grew by more than 5 per cent in the last quarter, with 2,335 sales, behind Melbourne with 3,735 land transactions.

HIA senior economist Shane Garrett said Perth's strong sales figures were still a lot lower than during the boom times and were driven by a local preference for standalone homes, compared to cities like Melbourne and Sydney where apartments were a bigger part of the market.

"The last two quarters of results do suggest there is an improvement happening and the new home-building market is starting to improve and recover," he said.

The report also found land prices across Australian capital cities grew by 4.2 per cent in the June 2017 quarter, much faster than inflation and wages.

Mr Garrett said it was a concerning trend in housing affordability.

"The simple arithmetic of it is for every quarter that land dwelling prices outstrips wage growth, it just puts home ownership beyond the reach of more and more people," he said.

"It's really become noticeable in recent years."

But Dr Rowley — who chairs the Housing Industry Forecasting Group, a joint industry and WA government committee — was wary of the report's findings, saying he believed Perth land was now more affordable than in recent years.

"We certainly haven't seen anything to indicate a big increase in lot prices," he said.

"The demand isn't there to force an upward pressure.

"There's slightly less coming on to the market as developers pull back in time of weak demand but not enough to ensure that existing lots have gone up significantly in price."

(Source: Australian Broadcasting Corporation )