Another fall in Perth home prices

Dwelling values in Perth fell 1.1 per cent last month while house price growth in other capital cities in Australia showed signs of slowing.

Perth home values fell to a median of $500,000 in February, according to CoreLogic RP Data, while the combined capital cities index showed a 0.5 per cent rise, down from a 0.9 per cent rise recorded in the previous month.

Perth and Canberra were the only cities to record a monthly fall.

However, dwelling values increased in every capital city during the past three months except for Sydney, with Perth recording a 0.2 per cent rise.

Home values in Perth were 3.1 per cent lower year-on-year, while the combined capital city value increased by 7.6 per cent.

“Dwelling values are still increasing across most capital cities, however, the results remain diverse,” CoreLogic said in its report.

“Sydney and Melbourne remain the strongest markets in trend terms, however, the gap is widening between the performances of Melbourne relative to Sydney.”

CoreLogic head of research Tim Lawless said the trend in home value growth was showing signs of increasing in the markets that had previously underperformed, including Brisbane, Adelaide, Hobart and Canberra, but not in Perth.

“Affordability constraints aren’t as apparent in these cities and rental yields haven’t been compressed to the same extent as what they have in Melbourne or Sydney,” Mr Lawless said.

Across the combined capitals, the rental market showed no growth; the first time this has happened since the records began in 1996.

Weekly rents fell a dramatic 8.4 per cent in Perth last year, while Darwin experienced the worst decline, down 13.3 per cent.

Mr Lawless said across the combined capital cities there is a higher number of new and total property listings relative to the same time last year.

“This in itself is quite interesting considering clear evidence of a slowing market over the second half of last year," he said. 

“With the number of newly advertised properties moving higher, it seems that vendors have begun 2016 with renewed levels of confidence.”

According to Mr Lawless, the number of homes available for sale is very different in some cities.

"The higher stock levels that are now evident in Sydney, as well as Perth and Darwin, suggest buyers have more homes to choose from and vendors may need to be more flexible in their pricing expectations,” he said.

“Overall, the latest results from CoreLogic provide further evidence of a controlled slow down in the pace of home value appreciation.”