Perth Property Expected To Decline Further

Perth Property Expected To Decline Further

Perth Property investors are in for some troubled days ahead, as the ongoing fall in property prices is predicted to continue for some time. In December 2014, median house prices reached a high of $551,500. Since then it has been a steady decline. This gloom is expected to continue.

An oversupply of properties is the primary reason for the decline in prices. Perth is estimated to have over 16,000 properties on the market at present (REIWA). This is considered to be a large supply, and thus there is enormous pressure on the local property prices. Unless this stock of unsold properties gets reduced, there will be no respite from the price decline. This is why experts are predicting a further decline in the property prices in the days ahead.

As per the latest data released by REIWA, the median price of properties was $527,250 at the end of September. Leading property experts are predicting that this median price may even crash below $500,000.

On top of this, the strict lending regulations issued by the Australian Prudential Regulation Authority (APRA) recently has caused some property investors to lose interest. Investor interest rates have increased, making property loans much costlier. Also, a limit has been imposed by APRA on how much the banks can lend to these property investors. Not surprisingly, many banks are now hesitant to lend to property investors and are looking for genuine buyers who plan to stay and live in the properties that they purchase.

Having said all this, some experts are more positive and feel that things are not really so bad after all. They are certain that if the median prices come down even further, then investment in property in Perth will become more attractive, and an automatic demand would be generated, resulting in the sale of the properties. This will again make the prices go up steadily. However, it seems that the biggest losers, in this case, would be the sellers whose properties are getting sold at lower than market prices due to this continuing decline in the median prices of properties.

Readers should always seek their own independent advice prior to making any decisions regarding property or finances.

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