Professionals Real Estate 
Western Australia is the most active market in Australia for first home buyer activity according to Shane Kempton, CEO of Professionals.
Mr Kempton said this trend was underlined by lending figures which show that first home buyers accounted for a bigger proportion of housing loans in WA compared to other parts of Australia.
“During July 2014, first home buyers represented 21% of all home lending activity in Western Australia. The remaining 79% of lending for Western Australia was accounted for by property investors (28%) and upgraders/downgraders (51%). This compared to the rest of Australia where first home buyers accounted for a smaller proportion of lending or mortgages processed (9.5%). In New South Wales, first home buyers comprised just 3.5% of all mortgages processed, 5.5% in Queensland, 9.4% in Victoria, 9.8% in South Australia.”
“The fact that Western Australia has such a high level of first home buyers shows that are local property market is still very affordable and there is no prospect of a housing bubble – a warning currently been made about the Eastern property markets.”
“First home buyers are still very active in the Western Australia property market because house prices are still very affordable relative to wages with the median house in Perth for example, around $250,000 lower than Sydney.”
“Another factor driving strong first home buyer activity has been high rents in Perth over recent years which has made it financially very attractive for renters to own their own home especially with interest rates being at near record lows.”
“Professionals expects first home buyer activity to remain strong during the coming year especially in more affordable areas where the median house price is below $450,000” he said.
Tips for buying your first home
- Remember that your first home is just a ‘stepping stone’ to purchase a better home at a later date. The longer you delay before buying your first home the harder it will be to achieve your long plan of buying your dream home.
- Now is a good time to consider buying a home. House prices have stabilised and sellers are prepared to negotiate on price.
- The old adage ‘pick the worst house on the best street’ currently applies in the real estate market. In some higher priced suburbs there is currently an oversupply of properties for sale. First home buyers should target properties in these areas that are poorly presented but well located and structurally sound. With cosmetic improvements, these properties can deliver higher levels of capital growth.
- Because the costs of selling and buying a home are very high, it is worthwhile considering purchasing an older style home that offers the potential for future extensions. If the land value of the property is very high (land 70%/ house 30% of total purchase price) then this type of property offers the potential for later improvements without the risk of over capitalizing. A good tip is to check if other properties in the area are undergoing structural renovations.
- If you decide to purchase a house and land package, it is worthwhile considering buying a total package including floor coverings, window treatments and landscaping. This means if you ever have to sell the property, it is totally finished. Many first home buyers who build a home for the first time sometime are forced to sell the property at a discounted price because the house is not finished i.e. no established gardens. It is important to note that with house and land packages your land will appreciate but the finished product will depreciate. You must calculate the cost of renting and paying progress payments while the house is constructed as opposed to buying an established property and moving in straightaway.
- First home buyers should focus on well located and competitively priced suburbs that have demonstrated a consist level of capital growth over many years. The suburbs should have good social infrastructure such as schools, shops and transport. They should have properties with a high level of land value. These suburbs include Victoria Park, Cloverdale, Queens Park, Ferndale, Warwick, Girrawheen, Ballajura, Forrestfield, Coolbellup, Padbury and Spearwood.
