First home buyer market collapses in Western Australia

The first home buyers' market in Western Australia (WA) has collapsed on the back of rising interest rates, the state's peak real estate body said on Wednesday.

Bourke has blamed the six interest rate rises since October, with the rate now sitting at 4.5 percent.

"The effects of six interest rate rises and the collapse in first home buyer activity since January is now evident in all market indicators for Perth and regional WA," Bourke said in a statement on Wednesday.

The artificial boom in first time buyers caused by the federal government's first home owners' grants was over, Bourke said.

Figures from the office of state revenue reveal first home buyers dropped from more than 2300 in April 2009 to 988 in the same month this year.

Real Estate Institute of Western Australia (REIWA) president Alan Bourke said applications for new dwellings had plummeted to just 260 while there had been 728 purchases of existing homes.

According to the REIWA, sales activity fell by 15 percent in Perth during April, with preliminary figures for May suggesting there has been no improvement.

Perth is the capital and largest city of the Australian state of Western Australia.

Source:Xinhua