Why Perth’s housing market is stuck in the doldrums

PHOTO: Perth property prices have been steadily declining since the end of the mining boom in 2014. Photo: TND

Property prices may be booming again in Sydney and Melbourne, but Perth’s market is still stuck in the doldrums.

Prices in the Western Australian capital dropped 0.8 per cent last month and are now down 21.6 per cent from their 2014 peak.

Driven by a slowdown in the mining sector, the heavy falls have seen many Perth home owners slip into negative equity.

Angie Zigomanis, associate director of residential property at BIS Oxford Economics, said this meant many people who wanted to move home were not able to do so.

“It means they’re trapped in their dwelling and can’t trade, because it will cost them money to move,” Mr Zigomanis told The New Daily.

The Reserve Bank of Australia flagged concerns around the rising incidence of negative equity in Western Australia and the Northern Territory in its biannual Financial Stability Review earlier this month.