Perth’s fragile residential property market is showing no signs of abating, with dwelling prices taking a further hit in February.
Property prices in Australia’s western capital dropped by 0.14% between January and February, resulting in a 3.44% market plunge over the past 12 months.
realestate.com.au data shows house prices declined by 2.49% in the year to February, while units were hardest hit with a 9.54% drop in the 12-month period.
The median sales price across all dwellings is now $475,000.
Perth’s fickle market has shown early signs of improvement, but any steps towards recovery have been quickly stymied says realeastate.com.au Chief Economist Nerida Conisbee.
“Prices in Perth are still falling and we have seen prices falling now for nearly five years, since April 2014,” Conisbee says.
“On the more positive side, we are seeing declines starting to flatten out.
“In 2017 we started to see things improve but then the Royal Commission was announced and that really derailed the recovery so there were some tough conditions in 2018.
“The challenge we have in Perth is that the recovery does seem very stop-start. We see one quarter and it looks really positive and then something happens and it turns again. It’s not like last time when we saw the market really take off because it was driven by the market boom and there was really no stopping it. This time it’s a very fragile recovery.”
Conisbee says Perth’s property market recovery may be further impacted by the looming Federal Election and mooted changes to negative gearing and capital gains tax concessions.
But she says there are several factors that signal it could be close to bottoming out and may soon turn around.
“We are seeing good growth in premium suburbs at the moment, such as Claremont, which has seen growth around 20%,” she says.
“The other positive factor is that we are seeing good rental growth in some suburbs as well, particularly when you look at the more expensive suburbs.
“There’s been early signs that things are starting to get better but we still have problems in many of the outer suburban areas. For example, suburbs where a lot of building has taken place and some of the cheaper suburbs are still not doing very well.
“It’s very much a tale of many markets for Perth at the moment.”