Perth property owners brace for more pain

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Perth property owners are bracing for a turbulent year as rising unemployment, falling house prices and an oversupply of rental properties creates a perfect storm.

Slowing population growth and a large amount of homes on the market are adding to the grim picture in the West Australian capital as the state's economy suffers under the weight of weak commodities prices.

WA's jobless rate hit a 13-year high of 6.6 per cent in November, heaping more pressure on an already underperforming housing sector.

CMC Markets analyst Ric Spooner said a cyclical housing downturn accompanied by rising unemployment in the range of 6.5 to seven per cent could be negative for a housing market such as Perth.

"A lot of people worry about job security," Mr Spooner said.

"The warning signs on the supply side are the number of properties on the market and how that relates to demand."

Perth home prices have fallen 4.9 per cent over the past year, the latest RP Data figures shows.

While not referring specifically to Perth, Mr Spooner said property prices could remain under pressure until a backlog of sale properties had been cleared.

"If you get increases in stock of unsold houses and a large pipeline of partly built houses feeding into that, it can be an indication that things are likely to get worse," Mr Spooner said.

SQM Research said there were almost 25,000 homes on the market in Perth in November, up from 23,400 in November 2014.

Perth's rental vacancy rate hit 3.9 per cent in November, more than double Sydney's vacancy rate of 1.7 per cent, SQM Research says.

"Perth has continued to record alarming increases in vacancies," SQM said in a statement.

This has lead to lower rental prices, with asking rents in Perth falling 7.6 per cent for houses in the past year.

Meanwhile, Real Estate Institute of Western Australia (REIWA) figures show rental listings increased 16 per cent to 9500 over the past three months to November 30 as rental prices softened.

A drop off in interstate migration into Western Australia combined with an increase in large-scale residential property developments in Perth meant there would be some "short-term" impacts on rental stock amid high vacancy rates, REIWA said.

Source: AAP Yahoo Finance