A leading Australian property adviser has come out and said he doesn't advise his clients to buy Perth property right now, and recommends alternative locations. 

"While I can understand why local real estate agents are trying to sell ‘hope’ by claiming that the market has stabilised, it is false hope," says Simon Pressley of Propertyology. He does not share the view that it is a good time to buy in Perth. 

Propertyology’s research suggested Perth property values would be lower by the end of 2015 and Pressley proved to be right. His outlook for Perth in 2016 is for this trend to continue, and he thinks property prices will be lower again by the end of the year, along with rents.

"Perth is a beautiful city with great infrastructure however, its economy is significantly more reliant on one industry than what would be expected from a city with 2 million population," says Pressley. "The economy lacks diversity. Demand and supply fundamentals are completely out of whack in Perth."

Propertyology research states that from 2013 onwards, construction of several large mining projects reached completion, but sharply falling commodity prices meant that haven’t been any replacement contracts for the tens of thousands of affected workers. The state’s unemployment rate has increased by 1.0% more than the national average over the last two years. State government coffers are such that spending is being curtailed."

"Our research also suggests that significant further job cuts in iron ore and gas are imminent, many of these workers will currently be residing in Perth," says Pressley. 

For the year ending June 2013, Western Australia’s population grew by 77,000 people whereas in the year ending June 2015 population growth had reduced significantly to 33,000 people. It has now been five consecutive quarters where interstate migration has declined. Before this current trend commenced in June 2014, it had been eleven years since a negative interstate migration figure had been produced in WA.

Pressley says the city normally builds around 18,000 dwellings per year, but over the last two years, 53,000 dwellings have been approved in Perth. "The over-supply pipeline will hang around for at least of couple of years yet," he says.