Falling home values in Perth are poised to drop for another two years after declining almost 2 per cent in the three months to February, according to leading research house RP Data says, reports Perth Now.
According to the RP Data-Rismark Hedonic Index, home values across the nation’s capital cities were down 1.3 per cent over the three months to end February, with the median dwelling price easing to $459,000 from a peak of $473,000.
And while the weakness has been evidenced right across the nation, it has been especially acute in Darwin (-9.0 per cent) and the two resource-centric capitals, Brisbane (-3.3 per cent) and Perth (-1.9 per cent).
Information and reports from RP Data are one of the many elements utilised by the Reserve Bank of Australia when determining the nation’s official cash rate.
In Perth, city dwelling values fell by 1.9 per cent, seasonally adjusted, or by 1.1 per cent in raw data terms, to a median price of $465,000.
“Indeed, Perth home values remain 0.7 per cent below their December 2007 levels”, RP Data senior research analyst, Cameron Kusher said.
Mr Kusher explained that the dramatic falls in median values in Perth and Brisbane was due to the local markets reacting to largely overpriced properties in recent years.
“What’s happening in Brisbane and Perth is fairly similar,” Mr Kusher said.
“It’s evidence that the values got too expensive in 2007 and the market has been correcting itself since then.
“What’s happening in Perth is exactly what happened in Sydney during the 2001-2004 boom.
“Following that boom Sydney values fell almost 10 per cent from peak to trough.”
Despite a mild rally in Perth’s property market last year, Mr Kusher emphasised that the inflated Perth market still had a way to go in terms of correcting itself.
“In Sydney it took five years to correct itself so in Perth it might be another two years to go.”
Australian home values across capital cities held ground during the month of February registering a zero per cent change, seasonally adjusted, or a slightly stronger 0.7 per cent in raw data terms.
Over the 12 months to end February, Australia’s capital city home values collectively have hardly moved, rising by only 0.8 per cent
Source: Perth Now
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