Another set of figures has underscored the doldrums facing Perth property, with RP Data's monthly look at the housing market showing Perth has overtaken Brisbane as the nation's worst performing capital city.
Another set of figures has underscored the doldrums facing Perth property, with RP Data's monthly look at the housing market showing Perth has overtaken Brisbane as the nation's worst performing capital city.
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According to the RP Data-Rismark Hedonic Home Value Index, Perth dewelling values dropped three per cent in the three months to April, taking the median house price down to $468,250.
Only Brisbane performed worse over the quarter, with its median home values dropping 3.1 per cent over the same period.
But in the 12 months to April, Perth values have plunged 7.1 per cent, edging out Brisbane, which fell by 6.8 per cent.
The only capital city market which experienced median house price growth over the quarter to April was Canberra, which experienced a 0.8 per cent increase.
Sydney and Melbourne were almost flat at 0.5 per cent and 0.8 per cent declines in value, respectively.
RP-Data Rismark research director Tim Lawless said the weak conditions seen in Perth and Brisbane compared with the comparatively high gains recorded in Melbourne and Sydney had driven a widening housing costs gap.
"Brisbane's median house price is now 24 per cent lower than Sydney's and 14 per cent lower than Melbourne's," Mr Lawless said.
"Pre-GFC the gap between Brisbane and Syndey dwelling values was as narrow as 6.4 per cent.
"Perth dwelling prices are now 18 per cent lower than Sydney's and 8 per cent lower than Melbourne's.
"At its narrowest, the gap between Perth and Sydney prices was just 2.3 per cent.
"The improved buying proposition in these cities should help support buyer sentiment, which has been very weak since the financial crisis."
The figures follow on from statistics released yesterday that showed new home construction plunged in Western Australia over the past month, indicating the woes gripping the residential market had hit both the new and existing home sectors.
The latest Housing Industry Association-JELD-WEN New Home Sales report for April indicated a sharp decline of 10.3 per cent for WA, in contrast to a flat national performance of a rise of 0.2 per cent.
For rental markets, the report said conditions were slowly beginning to improve across Australia.
Gross rental yields increased to 4.2 per cent for houses and 4.9 per cent for units over the quarter to April.
"With flat to falling home values and rental rates showing modestly consistent movement upwards, it is likely rental yields will continue to improve," Mr Lawless said.
"Yields are still a fair distance from the peaks seen in early 2009 when houses were returning 4.9 per cent on average and units were showing a gross yield of 5.4 per cent across the combined capital cities.
"Vacancy rates appear to be tight across each of the capital cities and with investor activity remaining low we aren't seeing a great deal of new rental stock being added to the market."
Mr Lawless said the market outlooks forecast more challenges for residential property across Australia, with the number of homes for sale across all capital cities 31 per cent higher than at the same time last year.
The number of sales for houses and units remain around 13 per cent under the fiver-year average, and 21 per cent below the same time last year, he said.
"The result is that a smaller number of prospective buyers have a larger pool of homes to choose from," Mr Lawless said.
"Properties are therefore taking longer to sell and vendors are having to adjust their price expectations downwards.
"Until stock levels start to be absorbed there is not likely to be upward price pressures."
