A sharp fall in house prices have given Perth its most affordable property market in 13 years, according to the latest figures from the Housing Industry Association.

Mortgages on median-priced houses in Perth have fallen by $200 a month over the past year, giving prospective buyers a chance to own a house in the WA capital.

According to HIA chief economist Shane Garrett, the cut in official interest rates has helped offset the impact of higher house prices in many capital city markets.

“Despite not being fully passed on by lenders, these reductions have helped bring the mortgage repayment burden down a little,” said Garrett.

Perth would have been more affordable had it not been for the almost stagnant wages running well behind other parts of the country. In fact, new loans for houses and apartments in WA fell 5.4% from last year’s numbers. The slowdown is also reflected across the country, with total loans falling by 3% in August and by 7.3% since peaking in June.

In spite of this, CommSec chief equities economist Craig James said that the overall property market is in tip-top shape.

“The topping out of the homebuilding boom is good news for all concerned. The hope is that the lift in new home supply in various regions over the coming year will manifest as just indigestion rather than something more significant,” said James.