Perth property prices are on track to return to a record high, with the median house price hitting $500,000.
The median price, based on data from the Real Estate Institute of WA and the Chamber of Commerce and Industry, suggests West Australians have shrugged off doom-and-gloom fears about the economy and have waded back into the housing market.
It comes as a consumer survey shows West Australians are feeling their most optimistic about the economy for nearly two years.
Updated REIWA analysis of residential property sales for the last three months of 2012 shows the median house price has hit $500,000 - $5000 higher than previously thought and 6.4 per cent higher than the same period in 2011.
Preliminary figures for 2013 indicate prices for the March quarter will "at least" equal the high of $505,000 set in the March quarter of 2010.
The rise is being fuelled partly by an increase in sales of more expensive properties.
REIWA president David Airey said the share of first-homebuyer activity had declined, but the increase in "trade-up" sales of more expensive properties had lifted the median price.
Acton Real Estate managing director Graeme Baxter said certain areas and price ranges had been performing well for a while but solid sales results were now being seen across the board.
The most sought after houses were in the $400,000 to $600,000 range.
"We are seeing more sales in the South West, western suburbs and along the north coastal region," Mr Baxter said. "And there have also been strong results in off-the-plan sales, all of which indicate a more complete market recovery."
The latest Curtin Business School-Chamber of Commerce and Industry survey of consumer confidence shows levels have bounced back strongly since hitting record lows in the December quarter.
The March survey, to be released today, shows the number of households that think economic conditions will get better over the next three months has doubled to 25 per cent. Those expecting it to get worse have plunged to a record low 8 per cent.
Longer term, 46 per cent of WA households believe the economy will improve over the next year, up from 35 per cent in December.
About one-third of households felt their personal financial position was better than a year ago.
The number of households worried about cost of living has eased but it still remains the biggest concern, with just over half nominating it as an issue, down from 53 per cent three months ago.
The Reserve Bank's interest rate cuts since October 2011 - dropping the official cash rate to 3 per cent - appeared to have little impact on spending. Most households reported no change to spending on luxury goods or using debt to pay for goods.
CCI chief economist John Nicolaou said households were feeling more confident about their finances after almost two years of consolidation through increased savings and paying down debt.