Perth property expected to continue roller-coaster ride
Turbulent times are likely for a city prone to fluctuation, writes Peta Tomlinson
It can be the best of times or the worst of times for the Perth property market. Heavily linked to the resources sector, it is a market prone to fluctuations - still in growth mode overall, but not to the highs some had banked on, and more of the lows than many expected.
Data from the Real Estate Institute of Western Australia (REIWA) shows that from 2001 to 2005, Perth house prices doubled on the back of the mining boom. By 2006, the west had Australia's second-most expensive capital, and there was speculation Perth was on track to overtake Sydney.
The first cracks began to appear in 2008, as shockwaves from the global financial crisis made their way across the Indian Ocean. Growth returned to the market in 2010, only to fall again for the next two years.
Then came robust growth last year. In a year during which Australian house prices rose almost 10 per cent, Perth was the second-best performing market, gaining 9.9 per cent to take house prices to a record high, according to RP Data.
Many predicted that momentum would continue, and 2014 would again be Perth's year. Australian Property Monitors' senior economist Andrew Wilson tipped annual growth of between 6 and 8 per cent for this year. Fitch Ratings forecast Perth's growth would "become more positive" and despite a slower rate of growth than 2013, "we are still optimistic to have a better and competitive market". So, how is the year shaping up?
The recently released RP Data-Rismark Home Value Index found that Perth was the only Australian capital city not to gain value over the first three months. REIWA, having trumpeted the historic price breakthrough the previous quarter, conceded the market was "choppy". The March quarter was down about 6 per cent compared to the first quarter of 2013, and listings had climbed to the highest level in 18 months, says REIWA president David Airey. Eyes have since drifted from Perth towards the Queensland capital, where Brisbane has usurped Perth as "the market to watch" this year.