The State Government could find itself financially short-changed by one of its own policy changes, WA's biggest residential developer has predicted as some heat comes out of the property market.
Satterley Property Group chief executive Nigel Satterley said the cut in stamp duty exemption for first-homebuyers would drive these people into lower-cost housing, hitting overall stamp duty payments to the Government.
From today, the stamp duty exemption for first-time buyers will be reduced to $430,000 from $500,000 for established homes.
The Government expects to collect an extra $55 million a year from the move.
But Mr Satterley said he believed first-homebuyers would largely disappear from the established housing market, instead focusing on new homes which retain the $500,000 exemption.
He said first-time buyers were better off buying a new home because of the incentives in place.
"Rather than raise more revenue for the Government, I think the changes will do the opposite with first-homebuyers taking the sensible decision to move into the new home sector, where their money will buy more," he said.
His comments came after figures from the Housing Industry Association showed the first fall in new home sales this year through May.
Nationally, sales dropped 4.3 per cent while in WA they were down 5.8 per cent. Despite the drop, WA sales in the three months to the end of May were almost 11 per cent higher than for the same period last year.
HIA chief economist Harley Dale said there were signs the market for building approvals had peaked, but the situation could improve if more land was available in cities such as Perth.
"Inadequate land supply is one prominent example of supply-side constraints preventing new home construction reaching its full potential," he said.
House approvals in WA are on track to surpass the 20,100 that was posted in 2005-06 at the height of Perth's housing boom.