Perth’s epic housing bust, where values have fallen for over 59 months with cumulative losses of 19.2%:
Has seen values fall to the same level as April 2006, according to CoreLogic:
“In Perth values were previously this low in April 2006 and values haven’t been this low across regional WA since July 2005”… House prices in Perth are the same as in April 2006, with a median of $436,000…
Perth is down 19.2 per cent and regional WA has fallen 32.5 per cent.
Here’s the chart:
Of course, when adjusted for inflation, the losses are much worse.
And it’s not just dwelling values that have crashed, but rents as well, which is pressuring landlords. According to the ABS’ rental series, Perth rents have fallen by 22% from their December 2014 peak:
According to the RBA, around 10% of mortgages in Western Australia are now in negative equity, numbering some 112,000 according to Digital Finance Analytics, whereas house repossessions are also surging. From The ABC:
“Almost 60 per cent of loans with negative equity are in Western Australia or the Northern Territory.”
A new survey by Digital Finance Analytics suggested as many as 112,000 WA households were in negative equity…
Legal Aid WA offers a mortgage hardship service to people facing the prospect of having their homes repossessed by their lender.
“Currently we’re helping about 60 people per month, every month since January, so that’s double the number we were seeing last year,” Legal Aid WA’s director of civil law Justin Stevenson said.
Data from the WA Supreme Court shows lenders have so far made 943 applications for property repossessions this financial year.
If applications continue at the rate of previous years, that figure is on track to exceed last year’s total of 1,234.
“It’s a problem that isn’t going away,” Mr Stevenson said.
He noted many mortgage holders were now facing higher repayments following the expiry of interest-only terms on their loans.
The March quarter national accounts showed that WA has entered a quadruple dip recession when measured by final demand:
Therefore, the negative equity poison has further to spread.