Perth's property market is on the verge of a sustained period of weakening house prices according to market analysts Australian Property Monitors.
Perth's property market is on the verge of a sustained period of weakening house prices according to market analysts Australian Property Monitors.
APM's latest national report shows Perth's median house price edged down 0.4 per cent to reach $508,776 in the December quarter of 2007, with the market posting better-than-expected growth of 1.7 per cent over the full year.
The median price for units and apartments fell 2.4 per cent in the December quarter to $348,464, according to the report, indicating growth of just 0.7 per cent over 2007.
Perth and Darwin were the only capitals to record losses in value over the quarter, while Melbourne experienced a staggering 9.4 per cent rise in its median house price over the quarter, and a nation-leading 25.2 per cent rise to $463,488 over the year.
This compared with a 20.1 per cent rise in Brisbane, 20 per cent in Adelaide, a rise of 11.3 per cent in Hobart, and a 4.8 per cent jump in Sydney.
APM general manager Michael McNamara said there were ominous signs that this was the beginning of a predicted weakening in the Perth housing market.
The group maintains that Perth housing prices could fall by up to 10 per cent over 2008.
"The Perth market has been more resiliant than we expected over the last 12 months but this report shows the beginning of a sustained period of weakness in those markets that should see significant further easing in property values over 2008," he said.
However, APM's claim of a 0.4 per cent fall in the December quarter remains at odds with the Real Estate Institute of Western Australia's estimate of a modest 1.1 per cent growth for the same period.
REIWA president Rob Druitt said APM's 0.4 per cent figure was based on early data, and the institute expected this figure to be revised upwards as more data was received.
REIWA estimates the Perth market will experience modest median house price growth throughout 2008, with those suburbs located near the beach, river or city, performing better than others.
"While the sharp prices growth of the boom is over, we anticipate modest growth continuing throughout 2008, although the market is patchy," he said.
Mr Druitt said APM had a track record of revising its data, such as a 5.6 per cent increase in their figures for December 2005.
In August 2006, APM predicted a Perth slump of up to 20 per cent for the following year, when in fact prices grew by 8.9 per cent according to their own data, he said.
"So long as our economy remains strong and population grows there will be continuing demand in the housing market and pressure for rentals."
Mr Druitt advised sellers to ensure their property was priced right to meet the market.
