A dramatic jump in the number of properties for sale in Perth could see house prices fall, with the number of listings rising by almost 50 per cent.
There were 13,535 properties listed for sale in the Perth metropolitan area for the week leading up to February 25, compared to 9207 for the same period last year, according to the Real Estate Institute of Western Australia.
REIWA President David Airey said with the long-term equilibrium for the number of listings in Perth at around 12,000, the number of properties up for sale was trending upwards.
"What is unusual is that listings have increased significantly in a short space of time," he said. "It's a big jump."
A number of factors have been attributed to the 47 per cent rise in listings, including a decline in the population growth rate, downturns in the mining and construction sectors, job losses, low consumer sentiment and the completion of a record level of dwelling constructions.
Mr Airey said the increased number of listings was likely to influence prices.
"Perth's median house price has been reasonably steady for the last six months, but this is unlikely to be sustainable given the supply and demand situation," he said.
"We are likely to see the overall median price come down through 2015, but this experience will be different for different segments of the market depending on local conditions."
And the trend of more properties coming on to the market could continue.
"After the GFC in 2008, listings grew to more than 15,000 in 2009, and we may approach those numbers again later this year," Mr Airey said.
Real estate agent Barry Wood, from Zoo Property in Sorrento, agreed house prices were likely to come down.
"My expectations, long term, I expect property to perform well for everyone," Mr Wood said.
"But, short term, the volume of sales may drop slightly further and prices will adjust by 3 to 8 per cent down.
"The public has the perception that it's a buyer's marker and it will be somewhat this year."
Mr Wood attributed the rise in properties for sale to numerous economic factors and said misinformation and confusion was contributing to an unstable market.
"The market is panicking a little bit," Mr Wood said.
"The reality is there are a lot of properties on the market place that are overpriced and never going to sell.
"If your property's not priced or presented properly, you should remove it from the market."
But Mr Wood said low interest rates would help to stop property prices from plunging.
"It's not all doom and gloom," he said.