The country’s mining state, Perth, reported the highest decline in property prices, dropping by 1.9 percent during the last three months to December to a median $465,000 says an RP Data-Rismark reports.

The figure is considered a plunge considering that countrywide, national capital city median home prices were up by 0.4 percent. Moreover, this is despite Perth being a strong mining industry player with its economy growing at an annual rate of 6.5 percent during the September quarter.

Overall, Perth’s housing market dropped by 2.3 percent in 2010 compared to the country’s national growth rate of 4.7 percent. Industry experts predict Perth home’s market will only recover by 2012.

Western Australia’s “economy itself seems to be moving ahead very strongly, getting back towards the boom-type conditions in the resources sector,” said ANZ senior economist Paul Braddick. “But that’s quite a contrast with the housing market, where it has definitely become a buyers’ market and prices have eased quite considerably.”

It didn't help Perth's market that there is an oversupply of properties available that is keeping property prices low. This has also led to lower rental rates becoming the second lowest in Australia following Melbourne.

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