Perth's residential real estate market remains the worst performing in the nation in terms of capital gains, according to the latest home values analysis by industry consultants RP Data-Rismark.
RP Data-Rismark's home value index showed home values in Perth went backwards in the three months to December, falling 1.9 per cent to a median of $465,000.
Over the 12 months to end December 2010, Perth home values shed 2.3 per cent, while median house prices across capital cities for the year were up 4.7 per cent, the report said.
The most expensive capital city was Sydney at $525,000, followed by Canberra ($510,000), Melbourne ($505,000), Darwin ($481,000), Perth ($465,000), Brisbane ($435,000), Adelaide ($387,000) and Hobart ($325,500).
But nearly all of the growth occurred in the first quarter of 2010, with national median dwelling values growing 3.6 per cent in the first three months of the year.
Rismark managing director Christopher Joye said rising interest rates had stymied capital growth.
"The capital city housing market very clearly peaked in May 2010, and remains below this point today," Mr Joye said.
RP Data director of research, Tim Lawless, said interest rates would continue to be the primary influence of the housing market in 2011."
The interest rate fuures market is not pricing in a full rate hike until March 2012," Mr Lawless said.
"While that seems optimistic, if borrowers only have to wear one rate hike between now and March 2012 Australian dwelling values have a good chance of realising higher-than expected capital gains.
"A long-term pause in interest rates would be welcomed by all segments of the housing market.
"If, however, the RBA raises rates several times in 2011, we think dwelling values will struggle to obtain much forward momentum over the year."
