From frenzy to fair value: How Perth’s property market has changed in 12 months

The Perth property boom may have slowed from the highs reached in the past year, but experts say good fundamentals still underpin a market that has simply returned to more balanced conditions.Perth’s median home value of $949,000 is 2.4% higher than a year ago, according to the latest realestate.com.au Home Price Report, but prices have declined 5.7% since the peak in March. REA Group senior economist Anne Flaherty said the Perth market has swung in a different direction compared to a year ago, when it was one of the hottest markets in the country with annual price growth above 20%.“It was seeing tons of investor demand, which was also contributing to strong growth in prices and now, if we fast forward 12 months’ time, we’ve had interest rates increase four times, and then we’ve also had a budget drop that dramatically reduces tax incentives for investors,” she said.“Another interesting dynamic is even though buyer demand is really cool in Perth, if we look at underlying housing supply, Perth’s still a market that has a very substantial undersupply of homes relative to the size of its population.”“Also we’ve seen a really big slowdown in new development activity in Perth, which is ...