Housing supply keeps Capes real estate listings buoyant despite dry-up

An unprecedented bottleneck of real estate listings is keeping Capes house prices buoyant. However, Real Estate Institute of WA president Joe White says it’s looking increasingly likely newly built homes are only coming through at a rate sustaining the status quo. While that’s good news for house prices, higher interest rates have buyers cautious, keeping a lid on rampant price increases of the past few years. The latest REIWA statistics confirmed strong growth for homes in the City of Busselton and Augusta-Margaret River shire. That flowed through to increased rents as well, with Margaret River now posting a median $600 a week, while Busselton rents jumped almost 9 per cent to $650. In the 12 months to July this year, Busselton homes on average gained 10 per cent, taking the median price to $680,000. But it was noted prices increased just 1.1 per cent in the past three months, auguring the slowdown Mr White observed. During the same 12-month period, Augusta-Margaret River shire homes charged up 11.5 per cent for a median price of $680,000, up from $610,000 a year ago. During that period, however, listings declined rapidly, and houses sold faster, but there were fewer sales overall. While interstate buyers were still a factor in the market, most people were buying homes to live in them now, rather than as investments. Mr White told the Times he also suspected population growth estimates were undercooked. “I am expecting to see the (new home) completions ease the problem, but I’m hearing a lot of stories about the population migration to the regions,” he said. “The easing may be offset by an equal and opposite effect due to population growth. “My gut feeling is that when the figures come out it will be higher than we thought.” Concerns about slow rates of new house completions were also confirmed this week by the Housing Industry Association. Their New Homes Sales report forecast next year to have the lowest level of new house completion in the past decade. HIA senior economist Tom Devitt said even cuts to interest rates would unlikely ease the burden. Mr White told the Times if the slowdown was confirmed it would show State and Federal building incentives had only contributed to a regular market trend. “The houses being completed which are the subject of the building incentives would have proved to be supply that was just keeping up with the housing demand due to population growth, rather than actually going some way to solving it,” he said. Mr Devitt said co-ordination at all levels of government was needed, including examination of tax settings, land release and planning reforms.