Perth house prices fall to pre-GFC levels

buying a house in Perth now costs roughly what it cost before the onset of the GFC in late 2007, according to preliminary figures released by the Real Estate Institute of Western Australia.

The median house price in Perth dropped by about 3% during the June quarter, with the metropolitan area experiencing its fifth consecutive quarter of price retraction, according to preliminary data from the institute.

Final data is expected to confirm a 2% drop in the Perth median house price to about $475,000. This is 6% down from the March 2010 peak of $505,000.

“This means the Perth median house price is now pretty much where it was in the December quarter of 2007 before the strong market correction and Global Financial Crisis of that year,” says REIWA president Alan Bourke. 

Flat sales turnover, little pressure on rentals and a surplus of listings are the main reasons for the Perth housing market remaining depressed. 

Markets were stronger in regions outside of Perth with the dip in median house price just under 2%, producing a median of $370,000. Sales activity picked up by about 4% in the quarter for areas outside of the city. 

The key beneficiaries of the fall in house prices have been first home buyers, with numbers increasing by 10% to 2,348 purchasers, the highest level since March 2010. 

However, this is still 26% below the average quarterly figure since the first-home owners’ grant was introduced 11 years ago. 

“First-home buyers remain a strong part of a weak market and represent 25% of all buyers in the quarter. The median purchase price for this group is now $413,000 in the city and $339,000 in regional areas,” Bourke says. 

The average first-home buyer loan in WA for April-May 2011 was $282,000, down by 5% from the peak of $298,000 in December of 2009.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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