Property developer Nigel Satterley believes the Perth residential property market is virtually at the bottom of its downward cycle, with increases to the first home owners grant and the drop in interest rates injecting some stimulus into the market.
Speaking at a property breakfast in Perth today, Mr Satterley said it was a buyers market, with first home owners presented with a "once in ten year" opportunity to buy at good prices.
"The falling interest rates and the first home owners grant is certainly helping put a floor in the residential market in the $200,000-$400,000 market, it's starting to bottom out, it won't drop more than 5 per cent," he said.
Mr Satterley said the dramatic rise in suburban house prices, by roughly 150%-160% between 2001 and 2006 happened too quickly and was not sustainable.
He also believes the Reserve Bank of Australia lifted interest rates too fast, and is tipping that interest rates will be sub-5% around March next year.
Mr Satterley said the new home market was currently very competitive, with developers offering various incentives including landscaping and technology packages.
Combined with the first home owners grant, now at $21,000, some first home buyers are receiving benefit packages valued at up to $45,000.
"First homebuyers are $45,000 better off than 12 months ago," he said.
New figures released by the Housing Industry Association late last month showed new homes sales in WA jumped 19.5% during September.
But over the entire September quarter, WA homes sales were down by 18 per cent on the previous quarter and 6 per cent lower than a year earlier.
Perth's median house price has fallen to $426,000, according to the Real Estate Institute of WA.
