Perth house prices rose very strongly from 2002 to 2006. Over this period, nominal prices increased by 150%. However, since 2006, nominal prices have only increased by 17%, which is a decline in real terms... http://i187.photobucket.com/albums/x308/LPShadow/Perth-House-Prices.png~original While house prices fell in real terms from 2006 to 2014, incomes kept on rising, meaning Perth's house price to income ratio today is back at 2005 levels... http://i187.photobucket.com/albums/x308/LPShadow/Perth-Price-Income.png~original And when we consider true affordability, by taking mortgage rates into account, Perth prices are more affordable than they have been since 2003... http://i187.photobucket.com/albums/x308/LPShadow/Perth-Mortgage-Income.png~original With affordability stronger than it has been for more than a decade, Perth today is quite similar to Sydney in 2011-2012. In 2011-2012, many Sydney bears expected prices to crash. What they didn't realise is that Sydney prices at the time were at their most affordable for over a decade. Instead of crashing, Sydney prices have increased by 40% since 2012. Could Perth experience a similar boom over the next few years?