Boost for builders

The scrapping of the $3000 first-homebuyers' grant for established homes could help the beleaguered local construction industry by encouraging buyers to build new homes, according to local property experts.

The grant will be cut from July 1 but the $10,000 grant for first-homebuyers who construct a new home will remain in place.

Real Estate Institute of WA Karratha branch chairman Richard Naulls said considering the significant drop in house prices in the region, the scrapping of the smaller grant would have little effect on first-homebuyers.

"It will affect homebuyers in Perth where they don't have the same sort of salaries but I don't see it being a huge reason for buyers not to go ahead and keep looking at buying here," he said.

"The way I read this is … they are trying to generate more work and money for the local construction industry.

"Unfortunately investors are still staying off - returns on investment are still comparably higher than Perth but they got it so good for so long here."

Pilbara MLA Brendon Grylls said the move was a good policy response to drive first-homebuyers to build rather than buy.

"The policy idea is to try and drive new construction, especially in a bit of a downturn because if that $10,000 is the difference between someone buying an old house instead of a new Madigan Road block then we want that to happen," he said.

"If I had my chance to pull the levers I wouldn't change a thing."

Real estate agents in Karratha have reported about 90 per cent of buyers in the past few months have been first-homeowners and owner-occupiers taking advantage of the steep fall in property prices.

REIWA's early analysis for the March quarter shows more than 33 per cent has been wiped off Karratha urban area house prices since March 2014, bringing the median price to $450,000, still $70,000 above the regional WA average.

Pilbara Development Commissions' March quarterly update puts Karratha's median settlement price at $503,500, nearly $70,000 lower than the average sale price.

PDC acting chief executive Terry Hill said encouraging construction of more homes would contribute to the stabilisation of the property market.