WA house prices fall thoughout 2008

Updated figures from the Real Estate Institute of Western Australia confirm that Perth's housing prices underwent four consecutive quarterly falls in median price in 2008 - something not experienced since 1982.

Based on current preliminary data, the Perth median house price was down by 12 per cent on the previous year. Perth's median house price was $412,500 in the December quarter, down from $435,000 in the September quarter.

REIWA President Rob Druitt said the other significant feature to emerge from the 2008 property market was the fall in turnover, with house sales down 27 per cent on the previous year.

"There are around 16,000 properties currently on the market, down from about 17,300 in September but still up by more than 19 per cent on a year ago. Much of this stock is from investors seeking to exit the market which is good news for first home buyers looking for entry-level opportunities," Mr Druitt said.

The Federal Government's First home Owners Boost has had a strong flow-on in the lower end of the market. It is estimated that around 40 per cent of all purchasers are currently first home buyers, twice what is normally
experienced.

Perth's median house price fell by 5.2 per cent in the December quarter, the largest fall for the year, but country areas fared much better.

REIWA data show that the median house price in regional WA is now $345,000, down by about 3 per cent, or $10,000, on September, but falling just 6 per cent over the year compared to Perth's 12 per cent drop.

Units and other multi-residential dwellings in Perth declined by about 10 per cent in 2008, to a median price of $345,000. In the country the unit price dropped a bit more, recording a slide of almost 11 per cent over last year to a new median of $285,000.

Mr Druitt said that land prices in Perth had remained steady for the last six months of last year, holding firm at a median price of $230,000 after falling by almost 13 per cent between January and June.

"Land prices in regional WA are more modest at around $157,000 for a residential block, with regional lots having dropped by almost 17 per cent during 2008," Mr Druitt said.

The average number of selling days in Perth has tightened a little to 76 days between when a property is listed and the seller accepts an offer. This is down from 80 days in September last year, but significantly higher than the approximately 40 days Perth experienced before the boom.

Around 8,900 properties changed hands in the December quarter, 25 per cent fewer than the same time last in 2007. Mr Druitt said that after generally easing off in September, median rents in Perth rose again in December to a median of $370 per week for houses and $350 per week for units.

The rental vacancy rate tightened a little to 2.4 per cent, although it's almost a full percent higher than a year ago.

"It's interesting that rents are increasing while the vacancy rate is reasonable, perhaps indicating that demand for quality rentals remains strong, particularly based on location," Mr Druitt said.

Regional housing markets have not been immune to the downturn. Overall houses sales volume for country WA is down 34 per cent with turnover in the regional units down by 36 per cent.

Mandurah-Murray saw medians decline by 9 per cent and Greater Bunbury dipped by 13 per cent when compared with December 2007.

Kalgoorlie-Boulder remained the only regional market to finish 2008 with positive price growth of 3.7 per cent in December, lifting the median to $321,000.

The Busselton Urban Area experienced the largest median price fall across the year with the December quarter median down 20 per cent. Sales volumes were down to a quarter of 2006 levels.

However, Mr Druitt said that falls in median prices experienced in a number of south west regional centres could be attributed to many first home buyers entering those local markets, skewing the data with a greater number of cheaper sales.