Property prices in Perth and in regional WA have fallen more than any other part of Australia, other then the oversupplied Gold Coast.
Real Estate Institute of Western Australia (REIWA) figures show residential property prices fell between 11 and 15 per cent in the inner-city suburbs of East Perth, West Perth and Northbridge in the year to June 30.
House prices in Perth’s most exclusive suburb, Peppermint Grove, fell 20 per cent, and properties at picturesque Gracetown, near Margaret River, fell a staggering 40 per cent over the same period.
What’s ahead for properties in the west?
According to an article in PerthNow.com.au vendors are already weathering a difficult spring selling season following steep annual falls in inner Perth, Mandurah, south of Perth, and the Margaret River holiday region.
A glut of new apartments and heavy discounting of prestige houses has been accompanied by sharp price falls for properties in desirable coastal areas.
Prices in one Mandurah suburb fell by 28 per cent, the figures show.
Westpac senior economist Matthew Hassan said the high prices achieved during the first mining boom in WA had priced many people out of the market.
“Since then, Perth’s really struggled to gain any traction in terms of price performance,” Mr Hassan said.
“I suspect there also may be an element of the mining boom having less flow-on impact in local economies … as businesses investing in those areas bypass local areas with fly-in, fly-out labour forces from other states.”
He said the mining boom “mark two” was quite a different beast to the first one.
“The positive spillages to the non-mining sectors are not as large and are not offsetting the negatives from a high Aussie dollar and relatively high interest rates,” he said.
“It’s a much more complicated mix.”
Mr Hassan said a common theme of slowing property prices was elevated interest rates.
“That’s the dominant force for the market,” he said.
He added that early signs for the spring selling season were not good.
“We’re going to have a bumpy second half to this year, even with rates on hold we’re likely to see more negatives coming through for housing.”
“Near term, it’s looking quite shaky.”
An expected interest rate cut would be key to stabilising house prices.
Australian Property Monitors analyst Andrew Wilson was reported in the article to say that said there were no clear signs that the inner Perth market and Mandurah had reached the bottom.
“Those particular areas are more inclined to reflect forced sales scenarios,” he said.
Still, he expected a recovery in WA next year.
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