House prices fall in WA in July

WA house prices fell one per cent in July according to the latest RP Data-Riskmark Hedonic Home value index, continuing WA's weak performance compared to other states.

Nationally the index rose 0.4 per cent seasonally adjusted following a sharp one per cent drop in June.

It also fell one per cent in Queensland but rose in Sydney (up 0.8 per cent), Canberra (up 0.6 per cent), Adelaide (up 0.2 per cent), Melbourne and Darwin (both up 0.1) per cent.

However house prices in all capital cities are up on a year ago.

Perth is up 5.7 per cent, compared to Melbourne (up 13.6 per cent), Darwin (up 12.5 per cent), Sydney (up 10.8 per cent), Canberra (up 10.7 per cent), Adelaide (up 8.5 per cent) and Brisbane (up 2.1 per cent).

The index is based on Australia's biggest property database including over 280,000 sales during 2009.

CommSec economist Savanth Sebastian said the housing sector is cooling but its not about to collapse in a heap.

"Property prices recorded a modest rise following sharp falls the previous month and the latest strength in building approvals should ensure healthy activity in the mid-term," he said.

"In general home prices are likely to grow at a more sedate pace over the coming year, causing investors to focus on greater diversity of their investments, especially given there is a significant amount of housing supply that will come onto the market over the next few months."