Property prices are set to languish for at least a year after recent Reserve Bank interest rate cuts failed to boost consumer confidence, a survey shows.
The latest WA Chamber of Commerce and Industry-Curtin University quarterly survey of sentiment shows that despite the fall in their borrowing costs, two-thirds of West Australians say they are not planning to buy property or renovate over the next 12 months.
CCI chief economist John Nicolaou said the Reserve Bank's 0.5 percentage point cut in interest rates last month - and another 0.25 percentage point cut this month not captured by the survey - had failed to offset households' money worries and political uncertainty.
"Rising living costs and the continued volatility of the global economy remain the main concerns for consumers," he said.
"However, this quarter has seen a large spike in households concerned about the current political environment, with the number rising from 30 per cent to 40 per cent."
Although the number of Perth property sales has risen since March, prices have not followed.
Most recent figures from the Australian Bureau of Statistics show prices in Perth dropped by 1.7 per cent in the year to the end of March.
Property buying conditions weakened over the quarter, according to the CCI survey, with the proportion of consumers believing conditions to be "good" decreasing from 46 per cent in March, to 41 per cent in the three months to June.
Real Estate Institute of WA deputy president Ian Cornell agreed that consumers were "shell- shocked" but said there were signs of life in the property market.
"Transactions are occurring closer to the asking price and people are sticking around to conclude the transaction," he said.REIWA data shows that sales since March have increased by 24 per cent compared with the same period last year.
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