A Western Australian property expert has forecast that house prices will continue to fall in Perth in 2009. This will be followed by a flattening through to 2012.
Figures due to be released later this month are expected to show that prices have plunged by about 11 per cent last year having pushed median house prices to $420,000 from a peak of $475,000 in December 2007.
In other words, the dramatic boom of the last few years is clearly over.
Due to the current decline in house prices homeowners could find themselves in the precarious position of owing more than what their property is actually worth. This could then lead to homeowners going insolvent and push house prices down still further.
Alan Langford BankWest's chief economist has stated that at worst the Perth housing market would fall by 15 per cent if commodity prices dropped and resource projects were axed.
Real Estate of WA President Rob Druitt said that last year's market was the worst since the recession in the late 1980s to early 1990s.
The current conditions are ideal for many first homebuyers, especially with interest rates dropping and the federal governments assistance easing affordability even further.
Hegney Property Group Chairman Gavin Hegney said that consensus was that the market would remain flat until 2010. Property experts believe that the market will be steady this year, with small price falls.