ABC - Caitlyn Gribbin reported this story on Thursday, Jan 30 2014 @ 12:46

ELEANOR HALL: In Western Australia, speculation about the end of the mining boom does not appear to be dampening house prices.



As mining has boomed in the state, rents have sky rocketed and the median house price has doubled.



And real estate analysts say that despite the slowdown in mining, house prices are likely to continue to rise in the state's capital. 



In Perth, Caitlyn Gribbin reports.



CAITLYN GRIBBIN: Real estate prices are a popular talking point in WA.



President of the Real Estate Institute of WA, David Airey can't escape the discussion.



DAVID AIREY: Well, certainly people are very keen to know what's happening in the property market. I rarely bump into people who want to see price of property drop.



CAITLYN GRIBBIN: In December, the institute announced Perth's housing market had set a new median price record of $545,000.



Now Mr Airey says that record will be surpassed this year.



DAVID AIREY: We expect the median price to grow to $570,000.



Certainly Perth is playing catch up to the very strong markets that we're seeing in Sydney and Melbourne and underlying that is the strong West Australian economy, which despite all the issues we have with budgets, it's still a very strong economy in WA, more so than in other states. 



The reason we've seen this strong market in Perth and growth in prices has really been driven by initially first home buyers who were seeking to buy cheaper stock, and they of course force people to trade up. 



CAITLYN GRIBBIN: Do you think you could see less of those first home buyers now though as the median house price continues to rise?



DAVID AIREY: First home buyers have started to diminish. They've dropped around 12 per cent in numbers since the June period last year and even further in the established homes market since adjustments were made to the first home buyers grant and the reason for that is increases in prices are forcing first home buyers out of the market.



CAITLYN GRIBBIN: It may be good news for home owners but not for those wanting to break into the market. 



Warren Palmer from the Salvation Army says high prices make it difficult for non-mining workers to buy a home.



WARREN PALMER: We acknowledge that I guess with any movement of median house prices there are winners and losers with everything, like with mortgage rates, and people would expect us to express some level of concerts for those particularly at the bottom end of the market that are trying to enter into owning a first home or owning a home if they haven't done in the past, and for those particularly that are a medium to low wage and, you know, this is a dream, an aspiration of people and I guess it potentially does make it a little bit more challenging for people to enter into that market. 



CAITLYN GRIBBIN: Nationally, median house prices are also on the rise, up nearly 10 per cent in 2013.



There's been extraordinary price growth in Sydney, where house prices rose 6 per cent in the December quarter, taking the yearly rise for the city to 15.1 per cent.



David Airey says house prices are strong in most capital cities.



DAVID AIREY: The reality is that Sydney has been the starter where the market has jumped across Australia, followed by Melbourne and certainly the Perth market has followed on from those two big capital cities.



So around Australia now Perth is sitting at the number three capital city in terms of median house prices. 



CAITLYN GRIBBIN: And are median house prices rising generally across the country?



DAVID AIREY: They're rising generally across the country but they're a lot slower in capital cities such as Adelaide, Hobart, Darwin and Brisbane.



CAITLYN GRIBBIN: The Salvation Army's Warren Palmer says the silver lining of Perth's high median house price is an easing in rentals.



WARREN PALMER: Rental price is slowing down at the moment. I'm sure it's brought a sense of release to some people in our community.



That things have stabilised in that area and potentially we're not seeing the significant growth that we have done in the past, I think is certainly some sort of comfort to people that are struggling at the moment.



ELEANOR HALL: That's the Salvation Army's Warren Palmer, ending that report from Caitlyn Gribbin in Perth.