House prices sliding in most Perth regions

Perth house price declines have accelerated through 2015 with the median house price down by 4 per cent  in the year to the September quarter, compared to a fall of just 0.2 per cent over the same period last year.

Although Perth house prices continue to generally fall, local suburban regions are recording varied outcomes. According to Domain, Perth’s south suburbs reported a positive result over the September quarter with the median house price increasing by 1.8 per cent. All other regions recorded negative growth with the exception of the north where prices were flat over the quarter.

The south suburban region has also recorded the highest rate of growth over the past year with the median house price increasing by a healthy 5.6 per cent. Next best result over the year however was the north where annual prices were steady, followed by the east down 2 per cent, the south west down 3.3 per cent, the south east down 3.8 per cent, and the city region where median house prices have fallen by 4.9 per cent.

Photo: Supplied

Perth’s south is the most affordable suburban region with a median house price over the September quarter of $427,500 followed by the east $490,000, the south east $505,000, the south west $507,500, the north $550,000 and the city region the most expensive at $780,000.

Photo: Supplied

Recent subdued housing market activity in Perth will be exacerbated by recent actions by financial regulators that have resulted in interest rate increases  for investors and owner occupiers that may undermine the local market’s prospects of a near-term recovery.

Lower levels of activity  in the property market can only have negative impacts on the economy. Reduced spending capacity by consumers and declining confidence heading into the pre-Xmas trading period also will not be welcomed by retailers.

Latest ABS data reports that the Perth jobless rate increased from 5.9 per cent to 6.1 per cent over September with the number employed falling by 1391 over the month.

The national economy also continues to underperform with similarly disappointing ABS job market data for September and lower than expected inflation data reflecting a largely stagnant economy. 

The global economy is also showing increasing signs of decline with growing concerns particularly over the performance of China. The Reserve Bank will likely take this into account when it next week determines the direction of official interest rates over November. The rapid decline in Sydney and Melbourne house price growth levels over the September quarter as revealed by Domain last week is also a factor the bank will likely consider.

Dr Andrew Wilson is Domain Group Senior Economist Twitter@DocAndrewWilson