Perth house prices declining at four times the national rate: REIA

Perth house prices have fallen at nearly four times the national rate, according to the latest Market Facts report by the Real Estate Institute of Australia.

Houses in the Western Australian capital have declined 6.3% over the September quarter to be down 8.2% over the past 12 months, with the median sales price declining $40,000 from $490,000 to $450,000 from September 2010 to September 2011.

By comparison, median capital city house prices have declined by $11,000 over the past year, with values down 3.7% over the September quarter (reversing a gain of 1.2% in the June quarter) to be down 2.3% over the past year.

The median capital city house price now stands at $521,000 compared with $533,000 a year ago.

Reflecting the current stagnant state of the market, the total number of home sales decreasing by 3.9% over the quarter to 54,529.

Home owners and investors are not the only ones struggling in Perth. The rental market has also taken a hit, with the vacancy rate declining by 0.6% to 2.8% over the quarter, the biggest fall of all capital cities.

Rents for three bedroom houses in Perth increased 2.6% over the quarter to be up 5.3% over the year to $400 per week, the largest annual increase of all capital cities.

Melbourne house prices declined 2.8% over the quarter, but it remains the only capital city where values have risen over the past 12 months – the median house price now stands at $551,000 compared with $543,500 a year ago.

The largest annual decrease has been in the depressed Hobart market, where prices are down 9.2% for the year ($345,000) followed by Darwin (8.2% to $507,000) and Brisbane (4.5% to $427,500).

Sydney house prices are down a modest 1.8% to $637,600 and more than $115,000 above the national average of $521,000. Sydney’s vacancy rate tightened further, falling by 0.1% to 1.4%.

The median prices of “other dwellings” (units, flats, townhouses, terraced housing, etc) declined by a more modest 1.4% to $424,176 during the September quarter, with prices virtually unchanged over the past 12 months.

Adelaide has recorded the greatest fall in unit prices, which are down 6% for the year following a drop of 4.8% over the quarter.

Darwin (2.4%), Sydney (0.6%) were the only capital cities to record modest rises in unit prices.

REIA president Pamela Bennett says the quarterly figures indicate the “has softened slightly”.

She notes that the quarterly figures do not reflect the rates cut in November and December, which she anticipates “will bring positive results for the residential property market by improving the level of activity in the market, in particular, the level of first home buyers entering the market”.

Other key findings of the report:

• Over the September quarter, rents for three bedroom houses remained unchanged in all capital cities except for Perth and Darwin, which increased 2.6% and 0.9% respectively.
  
  
• Rents for three-bedroom houses remain the highest in Darwin at $545 per week while Adelaide had the lowest rent for a three-bedroom house at $320 per week.
  
  
• Over the quarter rents for two-bedroom other dwellings remained unchanged in Sydney, Melbourne, Brisbane, Adelaide, and Hobart. Perth and Darwin recorded increases of 2.7% and 1.0% respectively. Rents in Canberra decreased 2.3% during the September quarter.
  
  
• Sydney recorded the highest weekly rent for two-bedroom other dwellings at $450 per week. Adelaide and Hobart recorded the lowest weekly rent at $270.