UDIA MONITORS LOT DEVELOPMENT ACTIVITY AND OVER THE NEXT FEW WEEKS WE WILL PROVIDE AN OVERVIEW OF HOW EACH OF THE FOUR MAJOR GROWTH CORRIDORS IN PERTH ARE PERFORMING.
The north-western corridor has led developer lot sales in greater Perth over the past seven quarters after slugging it out with the south-western corridor, which shone during the post GFC period, spurred on by the First Home Owner Grant’s Boost.
The commitment to high-quality product in a desirable area has led to fierce competition within a corridor impacted by stock shortages in 2013 and 2014.
Sales contracted marginally this quarter leading to a reduction in market share, down from nearly one in every three developer lots sold to one in every four developer lots sold in greater Perth.
The City of Wanneroo has the strongest sales for any local government area at 22.9 per cent of the greater Perth market – no other local government area breaks the 20 per cent barrier.
The number of lots on the market in the corridor has more than doubled since June 2014.
In response, the forecast construction for the next six months fell from 1522 lots to 957 this quarter. In the March quarter data, forecast stock levels for the next six months contracted from 194 per cent to 176 per cent of demand, well up from the shortfall in March last year when supply was just 96 per cent of demand.
This means there will be about 1.8 lots for every purchaser, which is more balanced than last quarter, so we may see sales recover closer to the December quarter figures.
The City of Wanneroo had an average lot size of 387sqm but was edged out of having the smallest average lot size by the City of Armadale, which had an average size of just 373sqm.
The Shire of Murray technically had the smallest average lot size at 335sqm, however there were only 16 sales, so is statistically a less robust measure than the combined total of 900 lot sales in the Cities of Wanneroo and Armadale.
In the March quarter, the WA Planning Commission gave final approval to 800 lots and received applications for 850 new lots so there is reasonable consistency in the approvals pipeline for the corridor.
Overall there are 15,910 conditionally approved lots in the north-western corridor, which is sufficient to meet demand if the majority of lots reach final approval within the four-year validity period.