Perth Property Market in Free Fall

Over Capitalisation an Issue For Perth Homes

It’s a contentious time within the Perth housing market as real estate resale value continues to decline.

PERTH property sellers were feeling a whole lot of pain in the past June quarter, with one in five selling their home for less than the previous purchase price.
This is compared to most homes in the country selling for a profit during the same period.

The latest CoreLogic Pain and Gain report reveals nine out of ten sellers made more than they originally paid when they sold their property during the June quarter.
But the level of loss for sellers in Perth and Darwin were close to historic highs.

In Perth 20.1 per cent of homes sold during the quarter were for a loss and in Darwin 24.2 per cent of sellers achieved less than they originally paid.

Nationally the level of loss was slightly higher, 9.5 per cent, compared to 9.3 per cent during the previous quarter, but CoreLogic analyst Cameron Kusher said it was not cause for concern.

Nationally the average loss hit its highest level since 2004, with those who lost out taking a bath to the tune of an average of $73,009.

But for those who turned a profit, the reward was an average $262,550.

In Perth, blue chip Peppermint Grove continued to perform well with no sales at a loss and only 7.7 per cent of Nedlands fell short of the previous purchase price but in the Perth CBD, more than one in two properties, 52.8 per cent, sold at a loss.

In Perth, 17.9 per cent of houses and 30.2 per cent of units are reselling for a loss.

Mr Kusher said this grim result reflected what was happening in the city, with values falling and more people willing to sell than those wanting to buy.

“The loss makes sales figures for houses in Perth at their highest level since September 1996 and for units the highest level ever with data going back to 1994,” he said.

“A lot of people are moving away from Western Australia and Perth to other parts of the country,” he said.

“Probably people that went there for jobs seven or eight years ago are moving back to where they came from.

“I think there is probably some more pain to come over the next few quarters at least.”

Areas linked to the mining sector continued to feel the full force of the slowdown in that industry.

This article first appeared in news.com.au