Perth property blitzes Sydney
Perth's median house prices are likely to top those of Sydney's by Christmas, making it Australia's most expensive property market.
The median price of a house in Perth grew 5 per cent, to $492,000, in the three months to September, capping off a 39 per cent surge in the past 12 months, while Sydney house prices eased 1 per cent in the same period.
If prices in both cities perform similarly in the three months to December, the median price of a house in Perth will be higher than the median price in Sydney for the first time.
The rise of Perth emerged in research conducted by Australian Property Monitors, which this week provided its house price data to the Reserve Bank.
APM spokesman Michael McNamara said the change was remarkable. "Only three years ago Perth house prices were half that of Sydney," he said.
Whether Perth's rise and Sydney's fall continues will largely depend on next week's interest rate ruling by the Reserve Bank.
Perth property prices slowed in the September quarter to 5 per cent after 13per cent growth in the three months to June.
Commentators are divided about the outlook for the market.
Real Estate Institute of Western Australia president Rob Druitt said property prices were expected to continue to grow next year, although at a slower rate than the 39 per cent recorded in the past 12 months.
"It's unlikely we will see any price reductions because we've still got a booming state economy, we've still got huge population influx into the state and we've still got construction industry at full capacity," he said.
But Perth real estate agent Glenn Davies, principal of Davies Allan Real Estate in the Perth suburb of Cottesloe, said the heated market could be headed for a "dramatic" cooldown. He said many buyers were young investors who had never experienced a property downturn. "These (younger) people don't realise that if we have some sort of hiccup in the resource sector, which is what we're hanging on, it could be dramatic," he said.
BIS Shrapnel property analyst Angie Zigomanis said the Perth market had begun to show a downward trend, with the number of first home buyers in July and August 8 per cent lower than at the same time last year.