Property buyers who were priced out of the Perth market during the boom over the last couple of years can finally get a foothold in the market as the median house price becomes more affordable.

Preliminary data from the Real Estate Institute of Western Australia (REIWA) showed Perth's median house price dropped by 2.7% to $457,000 over the three months ending March.

REIWA president Rob Druitt said the pull-back in prices was due to higher interest rates, a drop in overall consumer sentiment and a record number of listings now on the market.

The number of properties listed for sale more than tripled to 17,000 from 5,000 in just 18 months - flooding the market with choice and giving buyers more competition and more leverage in negotiating on price, according to Druitt.

Despite the record number of listings, Druitt said he was confident that pent-up demand from would-be buyers would soak up the excess throughout 2008. "As the population continues to swell on the back of a strong economy, many people have been keenly waiting and watching for the right time to buy," he said. "Now, with interest rates on hold and possibly coming down shortly, and property prices rationalising to a more affordable level, we're likely to see some renewed buyer activity in the market."

Vacancy rates have dropped to 1% in Perth in the same period, boosting a rental increase of 1.5% for houses and 3.3% for units.