Regions also feeling property price pain

Western Australia's regional property markets' fortunes have almost mirrored those of the sputtering metropolitan real estate market, with four of the ten worst performing suburbs in Australia located in WA coastal areas, new research says.

A list of 30 regional areas which recorded the largest decline in median prices since the peak of the property boom, released by property analysts RP Data today, showed Busselton recorded the second largest drop in the country, with a 21.1 per cent decline in values since May 2007.

Only Moira in Victoria recorded a bigger drop, with a 23.2 per cent decrease in median prices since June 2010.

Mandurah was ranked fifth with a 15.2 per cent drop since January 2007, Albany ranked eighth with a 13.3 per cent drop since April 2008, while Bunbury rounded out the worst ten performing regions with a 13.2 per cent drop in median home values since March 2007.

Kalgoorlie-Boulder (11th with a 11 per cent drop since February 2010) and Geraldton (8.8 per cent drop since October 2010) were the only other Western Australian regional areas ranked in RP Data's list.

The best performing regional markets were found in Victoria, with eight appearances in the 30 suburbs which experienced the smallest declines in median prices since their peak, Queensland (4), South Australia, Tasmania and Northern Territory (all 1).

Not since 2007 has a Western Australian regional area made that list.

"Typically, the performance of the regional markets is heavily influenced by the performance of the capital cities," RP Data's report said.

"With very limited scope for capital gains during the short-term, the prospects of a recovery in many of these regional markets over the coming year seems fairly unlikely.

"For those markets that have been performing relatively well the prospects of a further surge in values over the year also seems quite unlikely.

"Although the mining sector is powering the national economy, some of these regions (Broken Hill, Kalgoorlie/Boulder and Mount Isa) have been amongst the weakest performing regional markets."

RP Data said it expected many of the high-profile coastal markets would continue to underperform, hampered by affordability constraints, and a lack of demand.

Last week, RP Data research revealed that Perth's western suburbs were among the nation's worst performing in terms of median price reductions.

Mosman Park house values were the weakest performed in the nation, falling 43.1 per cent since August 2008, while East Fremantle median home prices dropped 30 per cent since October 2008 to be ranked third weakest.

Also making the list were Nedlands, which was ninth with a 22.7 per cent drop since January 2008; Cottesloe at 11th, with a median home values fall of 21.6 per cent since Jan 08 and Claremont at 13th, after a 20.8 per cent slip since January 2008.

Cambridge (-9.9 per cent since November 2010), Subiaco (-5.1 per cent since June 2010) , and Kalamunda (-2.3 per cent since July 2010) were the remaining Perth suburbs that made the list.

The only Western Australian suburbs ranked in the top 25 nationally for smallest declines in house prices since their peak were Cockburn (flat since June 2010) and Vincent (-0.3 per cent since March 2010).