Perth property demand weakening: BIS Shrapnel

Perth property prices rose 16% in the two years to June 2014 however has now declined by 3% to an estimated median house price of $580,000 in June 2015, according to a new report which found demand continuing to fall.

The BIS Shrapnel Residential Property Prospects 2015-2018 report found Perth property demand across first home buyers and investors beginning to weaken.

BIS Shrapnel senior manager and study author, Angie Zigomanis, said even net migration inflows are declining rapidly to the state.

“Consequently, vacancy rates have risen and rents have fallen, which in turn has resulted in the price decline in 2014/15,"Mr Zigomanis said.

 “Perth’s median house price is forecast to continue to fall over 2015/16 and 2016/17, and stabilise in 2017/18, when mining investment is expected to bottom out. The corresponding decline in new residential construction is expected to see the market also move back toward balance around this time. 

“Net overseas migration inflows are also slowing rapidly, having declined from 53,000 in 2011/12 to 19,000 in calendar 2014, while Western Australia will record its first annual net interstate migration outflow in 12 years in 2014/15.

Mr Zigomanis forecasts Perth’s median house price to be 3% lower by June 2018 compared to June 2015 levels, representing a decline in real terms of 10%. A similar decline is forecast for Perth’s median unit price.