Perth’s housing market is expected to continue its decline in 2019, with a trough not likely until 2020, according to the latest CoreLogic-Moody’s Analytics house price forecasts, which are substantially more negative than the previous report six months ago.
The report says the greater Perth region will experience a 7.6 per cent price fall this year, before a 0.4 per cent price rise next year, and 4.2 per cent increase in 2021.
Perth’s inner suburbs are forecast to be the worst affected, with Moodys anticipating an 11.4 per cent decline for 2019, followed by a further 5.4 per cent fall in 2020, before a 4 per cent recovery in 2021.
The major areas comprising Perth’s inner suburbs are the Cottesloe-Claremont area and Perth City, according to Moody's classification of the data.
Perth’s north-west region is expected to be the best performing, with a 4.3 fall forecast for this year, before rises of 2.7 per cent and 4.4 per cent in the following two years.
The major areas that comprise Perth’s north west are Joondalup, Stirling and Wanneroo.
The report said house prices forecasts in WA reflected the current weak economy.
“The Western Australia housing market remains in a slump, coinciding with disappointing economic conditions that emerged in the second half of 2018,” it said.
“Business investment fell last year, as well as government investment, while exports fell in the fourth quarter.
“A small recovery will likely begin in 2020, although values are not expected to recover meaningfully until 2021.”
Perth’s house price trend is broadly in line with the national average.
Australia’s eight capital cities are set to experience a 7.7 per cent house price decline this year, followed by a recovery of 1.9 per cent and 4.4 per cent in the following two years.
The latest Moody's forecast is substantally more gloomy than its previous forecasts.
In September last year it said the Perth market was starting to stabilise, as a result of rebounding commodity prices, which in turn was leading to a recovery in income growth.
Moody's added that the Perth market was also being supported by stabilising population growth of about 1 per cent annually.
It said house values in the greater Perth region were forecast to fall 1.9 per cent in 2018 and a further 0.5 per cent in 2019, before ticking upwards 1.4 per cent in 2020.
