Real estate experts believe Perth’s high rental prices are behind the recent surge in first-homebuyer activity, rather than low interest rates.
The Reserve Bank dropped the cash rate to 3.25 per cent last month, but Satterley Property Group chief executive Nigel Satterley said Perth’s median rental price of $450 a week was forcing first-homebuyers to return to the market.
Figures from the Real Estate Institute of WA released last month show first-homebuyer activity is at its highest level in three years.
“Properties are harder to find, available rental homes tend to be of poorer quality and potential tenants find themselves in bidding wars,” Mr Satterley said.
“Buyers are telling us that Perth’s rental crisis is hitting them hard and they know that wasted rent dollars are better put to owning a home.
“Our buyers report that while interest rate cuts are welcome, it is the high cost of renting versus buying that is driving the purchasing decision.”
Ray White WA chief executive Mark Whiteman said paying the median rental price of $450 a week worked out to be about equal to paying off a $340,000 loan over 30 years at an interest rate of 5.7 per cent.