On the upside, Perth house prices only fell by between 1.6 and 2.0 percent for the third quarter from 1/7/2011 to 30/9/2011. This indicates a slowing in the fall of house prices compared to the 2.0 percent fall in Q2 and the 3.3 percent fall in Q1.
This is an average. There will be areas that have suffered much higher falls than this, such as Mosman Park where—as an average for the suburb—house prices have had over 40 percent wiped off them.
The average house price for Perth is now sitting around $484,000 compared to $520,000 at the start of the year. Basically averaged house prices in Perth are now at levels last seen four years ago in 2007.
Forecasts are that prices could fall by as much as another 2.5 percent in Q4 which, if it happens, will bring the averaged house price down to around $470,000 wiping a further $14,000 off the value of the average house.
[Image above links to AFR article however the AFR now have a pay-wall and you will either need to already have an AFR subscription to open the article, or sign up for a subscription]
While the above reduction in real estate is no where near as dramatic as the 30 percent that has been wiped off the share market so far in 2011, the ongoing decline in real estate values is starting to become a general concern. Apart from the fact that individuals are directly affected it is a far bigger problem that a huge percentage of all of the major bank’s value and worth (capital) is directly tied to the value of their loans against real estate.