Perth median house prices were down 1.6 percent to $524,055. Rental yields in Perth have increased considerably in the last year, reflecting the nation-leading fall in property prices. Median house prices in Perth fell by 5.7 percent for the year ending September 2011 to $524,055.

Gross yields for apartments in the September quarter were 5.2 percent and 4.6 percent for houses. With all the hype around the mining industry, anyone would be forgiven for wondering where all the benefits are being seen – housing markets are generally slow, consumer confidence is low and everyone is saving rather than spending.  However, the good news on the resources front is that the mining boom is real and many housing markets around the resources centres of WA are tight in real estate terms.

Expect a significant revival in the Perth housing market next year, with price growth driven by the full arrival of the mining boom, is the general consensus. International and interstate migration levels have been slow; although above average population growth is set to continue

While international and interstate migration levels slow continue to slow down. The “China factor” remains a major contributor to buyer confidence and that has had mixed and confusing indicators since the August sell off in global stock markets. Some real estate agents suggest that the global stock market trend is a good leading indicator for Perth house prices, given the linkages between commodity prices, share prices and mining company activity.

After strong population growth of 3.1% in WA in the year to June 2009-10, growth has slowed. Population growth in WA was 1.1%, or 2.6% for the calendar year. Average growth since 2002 is 2% per annum. While international migration remains the driver of WA’s population growth, annual growth to December 2010 declined.

The surge in WA’s population growth from late 2004 resulted in the state supplying less housing than what was required for the most part of the last four years. Despite some over supply in the early 2000s, the shortfall in recent years suggests continued undersupply in this market.

Although median prices for both houses and units in Perth were at their highest levels on record in March 2010, according to REIA, the latest set of data showed declines.  Rising interest rates and continued price increases until the recent two quarters put further pressure on affordability.

The proportion of income required to meet average monthly mortgage repayments in WA has increased from 25.9% a year ago to 28.2% in March 2011. WA remains the third most affordable state, behind the NT and ACT. Increasing interest rates and an increase in the average loan size the percentage of family income required to meet mortgage repayments are expected to reach around 32% by the end of 2011. This may stabilise and decline on the short term as some indications are showing rising incomes in the state.