A combination of tax incentives and a dip in house prices has resulted in a dramatic increase in first home buyers in Perth, while in Sydney it is rising rents that are driving the decision to buy for many young people, according to recent reports.
REIWA President Rob Druitt said the State Government's stamp duty reform for first time buyers was now paying dividends, with loans for first home buyers up 22 percent in the June quarter.
"This surge in first homebuyer activity is seeing a much greater number of sales of properties at the more affordable end of the market, and this is having the effect of pulling the overall Perth median down a little," Mr Druitt said.
"First home buyers represented 24 per cent of the new loan approvals in June, which is up from their usual 20 per cent."
In Sydney, however, home-owners are sitting tight, resulting in a sharp decline in property turnover, according to second quarter 2007 data just released by Real Estate Institute of New South Wales (REINSW).
The figures show the number of houses up for sale in the period fell by 10.8 per cent and 12.2 per cent for the year while unit sales dropped by 4.1 per cent for the quarter and 16 per cent for the year.
"Sellers in some areas can't be enticed into the market, making the availability of stock an issue," said REINSW President Cristine Castle.
"However, when properties, particularly well-located units, do go up for sale they are realising good prices."
The residential rental vacancy rate for June came in at 1.5 per cent, a slight easing in comparison to the March quarter's rate of 1.2 per cent, but the amount of available property declined again in August when vacancy rates for Sydney dropped back to 1.4 per cent.
Mrs Castle said that increasing rents are encouraging first home buyers to consider buying units they would otherwise be renting.
"The older unit stock is irreplaceable at current value and sellers with realistic expectations are attracting buyers," she said.
