Perth has bucked the trend of it's geographic opposite Brisbane, by coasting into the end of 2007 with a flat market. The city had enjoyed substantial improvement in its profile since resources started driving a large part of the national economy, but a growth rate of only 3.1% last year has received no help from the recent rate rises.
"Perth continues to labour through a period of market stagnation and correction, a trend that's evident throughout much of Western Australia," says Andrew Donnelly, CEO of property research firm Braxton Chase.
But the news isn't all bad for WA, he adds.
"On the upside, strong growth continues to occur in various resource based markets such as Kalgoorlie and Port Headland," Donnelly says.
It's also important to note that the Perth market has two distinct sectors operating in entirely different ways, according to independent property advisors Herron Todd White (HTW).
"There is a two paced market in Perth where properties worth more than $1M continue to grow as cashed up buyers look to quality homes in excellent locations. Coastal areas are doing particularly well with good quality homes around Cottesloe, Freemantle and Sorrento finding plenty of interest," says HTW Perth director Brendon Ptolomey.
Outside of the high end, the market appears to flip back in favour of the buyer.
"Mid price properties below the magic million have slowed. Demand just isn't there so these homes haven't seen anywhere near the same growth as the high end," says Ptolomey.
"This slower sector coupled with stamp duty and other buy-in, buy-out costs means that many owners are considering a renovation of their existing home rather than upgrading to a new home. The problem then becomes locating available and reasonably priced labour."
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