New home sales defy gloom
Land sales across WA have defied the doom and gloom of the Federal and State Budgets, WA's biggest residential property developer has revealed.
Nigel Satterley, chief executive of the Satterley Property Group, said yesterday that his company's land sales last month were 50 per cent higher than for the same period last year.
Measures of consumer confidence have dropped since leaks about the Federal Budget emerged in April.
There has also been concern that aspects of Treasurer Mike Nahan's Budget, with its focus on bringing spending under control, has hurt consumer sentiment.
WA retail sales are growing at the slowest rate of any State.
RP Data's measure of house prices suffered one of its biggest falls through May as values across the country fell 1.9 per cent, including a 1 per cent fall in Perth. Mr Satterley said despite some of the gloom, sales activity was holding up.
"There has certainly been some negative talk surrounding the Budgets and reports that this may be affecting activity in the established market," he said.
"This is not the case in the new homes market, with sales reflecting the confidence of buyers and the excellent value to be had."
Mr Satterley said the supply of new home sites had caught up with demand, with about 17,000 lots released to the market in the past year.
It came after three years of industry-low releases.
According to Mr Satterley, there has been a pick-up in first-homebuyer activity and around median-priced homes.
"I think we are just hitting a sweet spot in the new homes market with good lot choices and price options," he said.
The property sector will be key to how the WA economy accommodates the slowdown in major mining construction work in the next two years.
Barclays senior economist Kieran Davies said there were some positive signs that the unwinding of the mining boom was being offset by growth elsewhere.
"With mining exports up strongly, mining imports falling and early signs of life in non-mining business investment, the unwinding of the record boom in mining investment is so far proceeding more smoothly than we had anticipated," he said.
