Land sales in Perth increased by a whopping 289 per cent throughout June, according to monthly data from the Real Estate Institute of Western Australia.
Driven by unprecedented stimulus for homebuyers from both the state and federal governments, 1471 blocks of land were sold in June, according to reiwa.com data, up from 378 lots in May.
The grants, which entitle eligible buyers to $25,000 and $20,000 from the federal and state governments respectively when building a home, were launched days apart at the start of June. Those who qualify for both, as well as the state’s long-established First Home Owner Grant stand to benefit from almost $70,000 of savings when stamp duty concessions are factored in.
The Federal Government’s HomeBuilder grant requires building to begin within three months of the contract date, while buyers must enter into a contract to build before December 31 to qualify for Western Australia’s Building Bonus.
REIWA President Damian Collins said the time factor for each grant had prompted a rush for land in June, leading to some supply concerns in the months to come.
“The large spike that we have seen in land transactions can be attributed to people fearing they may miss out on these grants,” he said.
“There is a real possibility that we will run out of titled and completed blocks in the coming months.”
June’s weekly land sales were headlined by the week ending June 21, where reiwa.com data showed 412 blocks of land were sold – the highest recorded number since August 2009, and more than the 378 sold in the entire month of May. A total of 360 lots were sold the following week.
By way of comparison, in the last week of May, 95 land sales were recorded – itself a monthly high – before both stimulus initiatives were announced the following week.
Vacant land sales recorded week-on-week increases of 35 per cent, 108 per cent and 58.5 per cent over the first three weeks of June, before tempering slightly with a 12 per cent fall in the week ending June 28.
As detailed in last week’s edition of New Homes, a number of land developers have progressed plans to bring new supply to market over the coming weeks and months.
The rate of increase shown last month suggests this supply may well be needed.