REIWA Deputy President Ian Cornell said while it was a positive sign with confidence returning to the established market, storms clouds are brewing around housing supply in Perth.
"We have seen a dramatic collapse of building approvals for April following the introduction of the new Building Act on 2nd April," Mr Cornell
"Ultimately, this means that the increased competition for houses and rental properties on the market will push up the prices for both as we move into spring," Mr Cornell
Mr Cornell's concerns follow a Real Estate Institute of Australia report out this week which found that housing affordability in Western Australia fell by 1.2 percentage points over the March quarter.
WA and the Northern Territory were the only state or territory where affordability went backwards for the first three months of this year.
According to the REIA Housing Affordability Report the proportion of family income required to meet home loan repayments in WA is now 24.1 per cent.
said that while this national report didn't look too good for our State it was still a marginal improvement on the same time last year.
"Of more concern is the affordability pressure on people in the rental system.
The proportion of income required to meet the median rent in Perth grew by 0.7 per cent in the March quarter and now stands at almost 21 per cent.
"The good news is that the number of first home buyers increased by 4.1 per in the quarter, up by a whopping 36.4 per cent on March last year," Mr Cornell
The REIA Housing Affordability Report found there were 3,910 first home buyers in WA for the quarter with the average loan to this group increasing by almost 3 per cent to $287,800.
However, Mr Cornell
, said it was concerning that the average loan to first home buyers was up by 6.5 per cent on the same time last year and that WA was the only state where average loans to first home buyers increased during the quarter.
"The REIA report also found that the total number of loans, excluding refinancing, fell by 0.6 per cent to 12,018 loans, but which is still 10 per higher than the same time last year," Mr Cornell
The Affordability Report found that the average loan in WA was $305,800, around 2.5 per higher than reported in the December quarter and 2.1 per cent up on the March quarter of 2011.
said the increased buying activity and decreased construction activity was likely to be troublesome for the rest of the year.
"We need some affordability circuit-breakers from the state government, including adjustments to the rate of stamp duty and an urgent review of the new Building Act to ensure it frees-up the process for creating new homes to meet demand," Mr Cornell