Perth market shows some signs of improvement

Nicole Cox via realestate.com.au

Perth’s house prices took another dip in July, but the outlook is brighter for owners of units and apartments with an improvement in values, new data from CoreLogic shows.

Perth retained the unenviable title as the weakest performing property market in Australia, with a combined drop in dwelling values of 1.3% for July.

The CoreLogic Hedonic Home Value Index reveals that unit prices surged 1.8% in July and 4.2% in the past three months to a median price of $400,000, but house prices dropped 1.6% last month to return a 2.5% decline since the same time last year.

The median house price in Perth is now $498,200.

CoreLogic says there has been a slowdown in growth conditions in the hottest markets of Sydney and Melbourne.

At the other end of the growth spectrum, Perth and Darwin have continued to see dwelling values slip lower during July, taking the cumulative decline to 10.2% in Perth and 14.5% in Darwin since both markets peaked in 2014.

“The ease in the rate of decline has been most visible in Perth, providing a signal that the Western Australian capital may be approaching the bottom of the downturn,” the CoreLogic report found.

“Listing numbers have been falling across Perth which is a positive sign of improving conditions and transaction numbers have found a new floor at around 2500 sales per month.”

CoreLogic Head of Research Tim Lawless says while the market has slowed from recent highs, growth remains robust.

“I don’t think there is any one factor causing the market to lose steam, rather it is the culmination of several factors working together,” Lawless says.

“Higher mortgage rates and tighter credit policies have dented investor appetite. This is clear from the RBA’s monthly credit aggregates which show investment related housing credit growth has consistently slowed from late last year.”

He says higher mortgage rates are now also impacting on interest only loans as well as fixed rate loans, which is likely to further deter some prospective buyers.