Perth house prices are on the verge of a sustained period of weakening, according to market analysts Australian Property Monitors.
Perth house prices are on the verge of a sustained period of weakening, 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 calendar 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 was the only state capital to record a loss in value over the quarter, while Melbourne led the states with a 9.4 per cent rise in its median house price over the quarter.
The Victorian capital also had the strongest yearly growth by far, rising 25.2 per cent to $463,488 during the year.
Brisbane was the next strongest performer, with its median house price increasing by 20.1 per cent in 2007, narrowly beating Adelaide (20 per cent).
Both capitals nearly doubled growth in Hobart (11.3 per cent), while Sydney posted a meagre 4.8 per cent rise.
Perth retained its position as the second most expensive city by median price, although Canberra jumped 6.7 per cent in the quarter to $506,570, nearly matching Perth.
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 house prices could fall by up to 10 per cent throughout 2008.
“The Perth market has been more resilient 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,” Mr Druitt said.
He questioned some of APM’s figures, noting that, in August 2006, APM predicted a Perth slump of up to 20 per cent for the following year, when prices grew by 8.9 per cent according to Reiwa’s data.
“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 said.
He advised sellers to ensure their property was priced to meet the market.
