WA Treasurer Ben Wyatt has taken the unprecedented step of complaining directly to the nation’s banking regulator that its “one-size-fits-all” approach is cruelling the Perth property market and the wider economy.

The West Australian can reveal that Mr Wyatt has written to the head of the Australian Prudential Regulation Authority, Wayne Byres, demanding it overhaul the rules it has imposed on commercial banks aimed at winding back lending to investors.

New regulations have been used by APRA to improve lending standards while also getting banks to tighten investor lending in the face of runaway house prices in Sydney and Melbourne.

Since then, house prices in those markets have slowed sharply, with Sydney prices showing their biggest fall since the global financial crisis.

But Perth prices, which had started showing signs of stabilisation, have begun falling again with many in the property market blaming APRA’s regulations.

Mr Wyatt said it was clear the regulator’s efforts were disproportionately hurting the WA and Perth property markets.

He said while prices had more than doubled in Sydney and Melbourne since 2006 they had increased 10 per cent in Perth. Once inflation was taken into account, Perth prices had fallen 15 per cent.

Regulations aimed at Sydney and Melbourne were leaving Perth as collateral damage.

“It is important that APRA develops a detailed understanding of the WA housing market and on that basis ensures that it carefully tailors any changes to macro-prudential requirements to local conditions,” Mr Wyatt said in his letter.

“Not doing so will harm WA households and businesses, as well as the local economy.”

Mr Wyatt complaints are similar to those expressed by Liberal senator Dean Smith who last month took his concerns to the regulator.

APRA has previously defended its approach to the investor market.

Another concern for WA is the possible fallout from the banking royal commission, which is due to report to the Federal Government in February.

Mr Wyatt said a further tightening of regulations because of royal commission recommen-dations could also be another threat to the Perth market and the State economy.

“The banking royal commission worries me as it might have an impact on APRA,” he said.

“The WA economy is in a very different position to the rest of the national economy.

“We’re in a different place and if there’s a change to lending and supply of credit then that could have a major impact here.”