House values across Perth fell by more than 2 per cent through February despite the cut in mortgage interest rates.
The fall was not confined to houses. The value of units dropped by 0.4 per cent in the month to be off by 0.9 per cent this year.
Over the past 12 months house value sin Perth are up by just 0.7 per cent, well short of inflation, while unit values have fallen in nominal value by 1.9 per cent.
Only Hobart has a softer house market than Perth with values on the Apple Isle up by 0.6 per cent.
The fall came despite the Reserve Bank slicing official interest rates to their lowest level on record. Banks cut their mortgage rates in line with the Reserve.
Nationally, prices edged up by a modest 0.3 per cent but almost all of the growth was in Sydney where house values lifted by 1.6 per cent.
Over the past year, Sydney values have climbed by 14.7 per cent.
RP’s head of research Tim Lawless said there had been step down in growth over the past three months.
He said outside of Sydney, lower interest rates were failing to drive up values.
“We might not see the lower interest rate environment stimulate the housing market as much as it has in the past,” he said.
“Weaker jobs growth, higher unemployment, declining affordability, low rental yields and political uncertainty are all factors that could dent consumer confidence and provide some counter balance to the rate cuts and quell any additional market exuberance.”
The Reserve Bank board meets tomorrow with markets putting the chance of a rate cut at 50-50
