Perth now leads the house price bust

In recent months, Perth has emerged as the housing market suffering the most significant declines in Australia, despite having previously been the nation's last stable housing market. This change in fortune is attributed to recent revisions by Cotality and deteriorating conditions throughout the housing sector. According to Justin Fabo from Antipodean Macro, Perth's seasonally adjusted monthly price growth has shifted from a boom to a bust.

Even considering non-seasonally adjusted data, Perth's property values have dropped by a substantial 1.7% in the last month. Furthermore, over the past quarter, Perth dwelling values have declined by 4.8%, making it the largest decrease among major capitals and tied with Sydney. The outlook for Perth home prices is grim, with current listings around 65% higher than a year ago, which is the biggest rise in the entire nation.

However, the situation in Perth is exacerbated by the falling sales volumes, which have dropped more drastically in Perth than anywhere else, down by approximately 19% in the year to September. This trend is further reinforced by vendors in Perth discounting their properties more sharply than anywhere else, excluding Sydney, where the discount rate is also at -4.8%. This suggests that vendors in Perth are trying to cut prices to meet market demand, but their efforts seem to be futile as sales continue to stall.

Perth has long been known for its cyclical housing market, characterized by periods of booms and busts. However, it is now firmly entrenched in the bust phase, with the indicators clearly pointing towards a prolonged decline in property values.