Perth median house prices have fallen for the 15th consecutive month, dropping a further 2 per cent over August to $450,000, and have been tipped to fall further towards the end of the year, according to analysts RP Data-Rismark.
RP Data-Rismark’s monthly look at house prices put the year-on-year drop in median home values in Perth at a nation-leading 7.1 per cent.
Across all capital cities, median home values dropped just 0.4 per cent, for a yearly fall of 3.2 per cent, RP Data said.
RP Data senior research analyst Cameron Kusher told WA Business News the weakness in the Perth market was due to a lack of affordability and a drop in consumer confidence.
“People aren’t out there spending in shops,” he said. “A house is a fairly big commitment and the median dwelling price you’ve got there for Perth is $450,000, so it’s an awful lot of money to have to go and spend.
“People are also concerned about what’s going to happen in Europe and what’s going to happen in the US.
“Sure, if that goes badly we’ll have interest rate cuts, but it means overall the economy’s not going well and unemployment’s likely to increase.”
Mr Kusher said he was surprised by the 2 per cent fall in Perth prices over August, because the prevailing sentiment was that the market must be close to bottoming-out.
But in light of the latest numbers, Mr Kusher said he expected further falls in the Perth market towards the end of the year.
“The thing that will turn around sentiment in Perth, is if values continue to fall affordability will obviously improve, and once some of those big new resources projects start to get going, more of that money will filter back down into Perth,” he said.
“But at least for the rest of this year you’ll probably see the market continue to fall.
“I don’t necessarily think they’ll be as big as the 2 per cent fall we saw this month across Perth, but for the rest of the year you’d probably think the market is going to show fairly similar conditions.”
In contrast to the home sales figures, Mr Kusher said Perth’s rental market was performing “relatively well”.
Mr Kusher said the population growth stimulated by the booming resources sector in WA was having a more marked effect on the rental market than on home sales.
Rental yields for houses in Perth were up 4.4 per cent in August, while units were up 9 per cent.
Sales volumes, Mr Kusher said, are “fairly low”, at 10 per cent below the five year average.
“It’s a big move to come from the east coast over to Perth, and I think people will go over and work but won’t be sure how it will all work out so they’ll rent for a year and see how it all goes,” Mr Kusher said.
“It’s certainly putting more pressure on the rental market than the purchase of houses.”
