With Perth's property prices falling, job loss is the real risk

While many Perth home owners are facing higher mortgage repayments combined with increased cost-of-living pressure, many still have still benefited from years of property value growth in Perth.

That was the message from financial experts at a forum hosted by 102.5 ABC Perth on tackling cost-of-living pressures.

Property valuer and analyst Gavin Hegney said while property values had begun to fall, with Perth experiencing a 5.7 per cent drop over the past three months, people who bought property five or more years ago had still recorded huge gains.

That's because while data shows the city's median dwelling value has fallen to $942,018, that is still 68 per cent higher than it was five years ago.

"Even though the market's gone down and will go down, it'll only probably take away 12 to 18 months of our gains in the last part of the cycle, and we had a boom for five years," Mr Hegney told the forum.

Fellow panellist and private wealth adviser Phil George agreed, pointing out the years of strong gains had allowed many borrowers to build up large amounts of equity in their homes.

"I think it's really only been the last six months that we've seen depletion in housing prices," Mr George said.

"It's going to be tough for those who are new entrants [to the market], but let's not forget that a lot of people, even just over the last three, four, five years, have built up quite strong equity in their homes."

Mr Hegney said he believed the market was about halfway through its downturn, with perhaps another 10 per cent fall in values still to come, and predicted a turnaround around the middle of next year.

Job loss riskier than negative equity

The panellists said while recent buyers with large loans may find themselves in negative equity — where their home is valued at less than their loan — that would only be a real problem if they couldn't continue to make repayments.

"Negative equity is not a problem unless you have to sell," Mr Hegney said.

The real risk, according to independent financial planner Nick Bruining, was for people who lost their income entirely.

The national unemployment rate was 4.7 per cent for September, the highest level since Covid, with a number of employers, including Canva, Woodside and NAB, announcing plans to slash jobs in recent weeks.

"We've had some really bad news in the last couple of days," Mr Bruining said.

"You can often manage your mortgage payment [by working] overtime and cutting back.

"But if you lose your job, all bets are off. It's a real crisis if you're a mortgage holder or have debt."

Mr Bruining said people looking for interest rate relief would be unlikely to see rates of 2 or 3 per cent again anytime soon, adding he thought current rates were probably likely to remain.

"It's generally regarded that interest rates have been kept artificially low since the global financial crisis in 2008," he said.

"What we're seeing is a return to normal.

"Get used to the 6 and 7 [per cent rates], because that's probably where it's going to settle down."