New apartments in the suburbs are set to become a hit with first-homebuyers, according to top real estate agents.
Mark Merenda predicts that entry-level buyers will increasingly choose off-the-plan apartments in a bid to take advantage of the upcoming $10,000 grant for newly built dwellings.
The State Government will increase the grant for new homes from $7000 after September 15, and will more than halve the amount for established homes, from $7000 to $3000.
Mr Merenda said most entry-level buyers sought properties under $500,000 so they could avoid stamp duty.
With this budget pricing them out of the city, they were likely to buy in inner-suburban areas.
House and land packages also attract the $10,000 grant, but Mr Merenda believed there was a move away from these properties because entry-level buyers did not want the hassle of building or living in new areas that were usually far from the city.
Ellie Coleman, 25, bought off the plan in Joondanna in May and is typical of the future first-homebuyer market.
The senior supply purchaser bought her two bedroom apartment for less than $500,000, and decided on Joondanna because it was close to the city.
She said most young people buying their first home did not want to live in the outer areas where many house and land packages were available.
Originally from Adelaide, she said she was struggling to adapt to Perth's astronomical property prices.
"In Adelaide you could buy a four-bedroom family home 6km from the city for this price," she said.
Agent Peter Barwick said apartments were not good investments, claiming they grew at less than a third of the growth of homes on average.
"Some apartments sold for $900,000 have come back on the market for $450,000 (such as in) Coogee and Mandurah," he said.
WA's top five agents said properties priced up to $600,000 were selling quickly.
Most of the top five agents said the middle and luxury markets were flat, which they attributed to economic uncertainty.