Owing to Western Australia’s distinctive commodity exposure, the Perth property market is subject to a different cycle to the reast of the nation.
Unlike the major east coast capitals, where all four house price series have tracked each other closely over time, there are significant divergences in Perth, with the ABS providing the most positive results and Residex the most negative (refer to the August 6 issue for an explanation of how each house price series is constructed).
Perth housing has been in the doldrums since 2007, with real house prices falling by between -6% and ‑20%, depending on the indices, over the past five years. As such, Perth fundamentals look more sound than many other Australian cities.
Yet is history is any guide, the recent heavy falls in iron ore prices may have something to say about that…
To read the rest of this article take up your free 21 day free trial at Macro Investor.