If you’re thinking of investing in property in Perth, now would be a great time. Recent figures from the Housing Industry Association (HIA) indicates that the sharp fall in prices has given people previously priced out of Western Australia a chance to invest in the market.

Servicing a mortgage on a median-priced home in Perth has decreased by $200 a month over the past year alone. House prices are dropping not only in the metropolitan area – housing affordability is also dramatically improving in regional areas.

According to Shane Garrett, chief economist at HIA, this year’s cuts in official interest rates have helped offset the impact of higher house prices in many capital city markets. “Despite not being fully passed on by lenders, these reductions have helped bring the mortgage repayment burden down a little,” he said.

Perth has had more than 23,000 properties listed for sale over the past 12 months, and the city would be even more affordable if not for stagnant wage growth and economic sluggishness.

Nationwide, there has been a slowdown in new loans for houses and apartments. According to the latest data from the Australian Bureau of Statistics (ABS), the number of approved home loans has hit a 15-month low after experiencing two consecutive months of decline.    

The number of housing loans that were approved for owner-occupiers fell by 3% in August and by 7.3% since peaking in June.

On a more troubling note, CoreLogic recently reported that house values in Perth have shed 7.1% so far this year. When inflation is added, the drop is nearly 10% over the past 12 months. Across both units and houses, dwelling values in Perth are back to where they were in 2007.

Tim Lawless, CoreLogic’s head of research, said house prices in Perth weren’t just being hit by economic sluggishness as demographic factors also played a role in the fall in house prices.

“In markets like Perth…where dwelling values have been falling consistently, the slowdown in transaction numbers is related to demand which is evidenced by the higher number of homes available for sale as well as the sharp slowdown in migration rates,” he said.