Research by CoreLogic confirmed that over the past 20 financial years, combined capital city dwelling values fell just twice.
So let’s take a look at how the Perth property market has performed over the last financial year.
Dwelling values have fallen over each of the past three financial years however, the rate of decline has slowed from -4.7% in 2015-16 to -1.3% in 2016-17.
At no other time over the past 20 years have values fallen over three successive financial years in Perth.
While some have called the bottom for the Perth property market, research suggests it is still in its slump with a significant oversupply of properties for sale.
As opposed to the eastern states where jobs are being created, Perth lost around 4,406 jobs last year.
At the moment there is 8.3 months of established housing stock available for sale in Perth.
How does Perth compare to the other capital cities and what does this mean for the future?
In most capital cities, the rate of value growth over the past financial year was superior to that over the previous year (the exceptions were Brisbane and Darwin). A number of cities recorded their greatest increases in values in a number of years highlighting that the rate of growth has been accelerating.
Two of the primary factors influencing the rebound in capital gains during the most recent financial year were:
The rebound in investment activity after 2015/16, which saw investment activity slow on the back of changed prudential policies implemented by APRA.
Successive rate cuts in May and August last year which added further incentive to property buyers.
With a new round of macroprudential policies announced at the end of March this year, its likely there will be a similar, if not more pronounced slowdown in investment activity across the housing market.
Coupled with affordability constraints and higher mortgage rates, we can expect the 2017/18 financial year will record a less substantial rate of capital gains that what was seen in 2016/17.