Perth house prices have suffered their biggest quarterly decline on record, falling 7.4 per cent to $1.115 million as the Western Australian market undergoes a sharp reversal.
Figures from Domain’s House Price Report show the median house price dropped by $88,664 in the three months to September, the largest fall recorded among Australia’s capital cities.
House prices have now declined for two consecutive quarters, marking Perth’s longest downturn since 2019. Unit prices fell by 6.5 per cent, or $45,487, to $659,561 — also the steepest quarterly decline recorded in any capital city.
Dr Nicola Powell, Domain’s chief of research and economics, said the figures showed a “sharp turnaround” in Perth’s housing conditions after several years of strong growth.
“We’ve seen an awful lot of headwinds collide over a short period of time this year,” she said, pointing to interest rate rises, the prospect of another increase and reduced borrowing capacity.
Powell also said changes affecting the taxation of investment housing had unsettled investors, while cost-of-living pressures were placing additional strain on households. New investor activity had pulled back, she said, as demand weakened and supply increased.
Property expert Mark Hay said the reported fall was more severe than the conditions he was seeing in the market, describing it as “a bit more drastic”.
“I think we’re just doing a fundamental correction,” he said, noting that Perth had recorded substantial price growth over the previous three years.
Hay said there were just over 8,000 listings on the market, compared with between 12,000 and 15,000 in what he described as a balanced market. The rental vacancy rate remained below 2 per cent, against a balanced range of 3 to 5 per cent, while rents were continuing to rise.
Over the year, Applecross was the only suburb recorded as having a lower median house price, with values down 7.7 per cent. Leederville recorded the strongest annual increase at 32.8 per cent, followed by Madora Bay at 30.8 per cent and Kalamunda at 30.5 per cent.
Powell said the changing market presented mixed prospects for first-time buyers. Falling prices could offer hope after Perth house prices rose 82 per cent over five years, while unit prices increased by 64 per cent.
But she said prospective buyers could also be wary of entering a market where prices were declining and their property might be worth less soon after purchase. Hay said many first-time buyers were instead waiting for greater certainty.
Powell said Perth’s downturn showed that the slowdown in Australian property prices was no longer confined to Sydney and Melbourne. She expected prices to continue falling for the rest of the year and probably into early next year.
