Australian Money Forum

WESTERN Australia's property bubble has been pricked and prices could drop as far as 20 per cent as home buyers flee the market.

Turnover in the market has dropped by 16.1 per cent since its peak in June, based on the number of new home loans being approved, with a 4.1 per cent fall in November.

"There is not a lot of depth of sales volume in West Australia, so once you see demand start to fall, there can be quite a big change in prices," property analyst Louis Christopher said yesterday.

Mr Christopher said property prices had risen a lot more in Perth than they did during the Sydney boom, and could now fall further than the 10 per cent price drop suffered by Sydney in 2004.