Sydney and Melbourne’s skyrocketing house prices show no signs of pulling back any time soon, but over in Perth it’s a different story.
Home owners in the West Australian capital are battling to pay their over inflated mortgages with house prices in free fall.
Property was in high demand in Perth in 2007 and again in 2012 thanks to the mining boom, leading to strong price growth.
But now prices have dropped by double-digit percentages in some suburbs, with warnings Sydney and Melbourne could experience a similar fate in the next few years.
‘There’s probably a lesson for Sydney and Melbourne today of perhaps what’s coming after the market turns,’ Perth property valuer Gavin Hegney told the ABC’s 7.30 program.
He said West Australia was once ‘infallible’ and ‘really booming’ but times have dramatically changed.
In Mandurah, south Perth, some people have seen the price of their properties fall by a staggering 40 per cent in a decade.
Daniel Johnston, 35, purchased an investment property in the suburb for $580,000 in 2007 but now it is only worth $350,000.
‘We thought it might slow, the property price, but never expected the drop that Mandurah has had. It’s nearly halved,’ Mr Johnston told 7.30.
He is fearful he will lose his family home because he is struggling to pay back the $500,000 mortgage on the investment.
West Australian Lifeline financial counsellor Jenny Cecil said there has been a surge in the number of people reaching out for help.
”They’ve been unemployed possibly eight to 12 months, so when they do come to see us it’s sometimes difficult to offer options or arrangements to repay debt,’ she said.
In the past 12 months, Sydney house prices have risen by 13.1 per cent and in Melbourne they have jumped by 15.2 per cent in the same period.
The median Sydney house price now stands at $1.15 million, while in Melbourne it is $843,674.
Source: Perth’s property slump post ‘a lesson’ for east coast | Daily Mail Online
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