The first home buyers’ market in Western Australia has collapsed on the back of rising interest rates, the state’s peak real estate body says. Figures from the office of state revenue reveal first home buyers dropped over 50%, from 2300 in April 2009 to 988, in the same month this year.
Real Estate Institute of Western Australia (REIWA) president Alan Bourke said applications for new dwellings had plummeted to just 260 while there had been 728 purchases of existing homes. Mr Bourke blamed the six interest rate rises since October, with the rate now sitting at 4.5 per cent.
”The effects of six interest rate rises and the collapse in first home buyer activity since January is now evident in all market indicators for Perth and regional WA,” he said in a statement on Wednesday. The artificial boom in first time buyers caused by the federal government’s first home owners’ grants was over, Mr Bourke said. According to the REIWA, sales activity fell by 15 per cent in Perth during April, with preliminary figures for May suggesting there has been no improvement.