AFTER A RECORD BREAKING RUN OF SALES IN 2013, THERE WAS A SLIGHT DECLINE IN LOT SALES THIS QUARTER ACCORDING TO UDIA’S URBAN DEVELOPMENT INDEX, A SURVEY OF THE THIRTY LARGEST LAND DEVELOPERS IN WESTERN AUSTRALIA. WITH STOCK IN DECEMBER REACHING CONCERNING LEVELS THE FALL IN SALES IS NOT SURPRISING. HERE IS A QUICK SNAPSHOT OF WHAT IS HAPPENING IN THE MAJOR LAND MARKETS IN PERTH.
The North Western corridor, which takes in the City of Wanneroo and the City of Joondalup, remains the strongest market in Perth. With a twenty-nine per cent share of the market it is still a very active corridor even though it cooled five percent over the quarter. The average price of the lots sold increased, along with the average size, which is an early indicator that the up-grader market is strengthening. There will be plenty of stock with construction being ramped up five percent over the next six months, with the average size lifting to 408m2.
The North Eastern Corridor, which is dominated by the City of Swan, saw sales fall thirteen per cent. This was forecast by UDIA in December due to the stock shortages in that region. Stock remains tight in that corridor but with $118m worth of lots sold over the quarter, there is still a very strong appetite for land in the area. The average price and size of lots remained fairly constant in the March quarter which is good news for buyers.
The South East metropolitan corridor, which includes the City of Armadale, the City of Gosnells and the Shire of Serpentine Jarrahdale, also experienced a downturn in sales. With the lowest average price in Perth, it is likely that market will continue to sell well, but maybe not at the record pace experienced in 2013.
The South Western metropolitan corridor also had a thirteen per cent fall over the last three months with the City of Cockburn bucking the downward trend with a sixteen per cent lift in sales. Lots in the City of Rockingham and the City of Kwinana fell fifteen per cent and nineteen per cent respectively.
The major driver for the fall in sales was the availability of stock; in the December quarter survey virtually every growth area had a forecast shortfall. Looking forward over the next six months, supply should not be the problem it was, which is great news for new home buyers.