PERTH home prices are back on the slide, despite green shoots across the rest of the economy, though the rate of decline is still slowing.

Home values in Perth fell 0.6 per cent last month, according to figures released by Corelogic today, to be down 1.5 per cent over the past 12 months. They also fell 0.6 per cent in July.

Corelogic estimated the median Perth house price at $477,538 in August.

The value of units in the metropolitan area fell another 0.4 per cent for the month, taking the quarterly fall to 2 per cent and the annual slump in value to 5.5 per cent.

Corelogic said that, with credit lines from banks likely to remain tight and a Federal election in the air, the outlook for the national housing market remained “challenging”.

“Advertised stock levels are already 7.6 per cent higher than the same time last year across the combined capitals, despite a 5.7 per cent reduction in ‘fresh’ stock being added to the market,” its latest report said.

“The rise in inventory is simply due to a lack of absorption; with fewer buyers, homes are taking longer to sell and clearance rates have trended into the mid to low 50 per cent range.

“Vendors will need to be realistic about their pricing expectations and ensure a high quality marketing campaign accompanies their property to market in order to make a successful sale.”

The falls will add further pressure to households as the other major banks mull rate rises following Westpac and Suncorp’s lead to push up borrowing costs despite the Reserve Bank holding is target rate steady last month at 1.5 per cent.

The Commonwealth Bank, National Australia Bank and ANZ are yet to announce any rate rises, but all will likely be looking for ways to increase their margins as their own costs of borrowing rise.

House prices across Australia’s capital cities dipped 0.4 per cent in August, and are down 3.5 per cent over the past year. That was driven by big falls in the Sydney market, which is down 7.1 per cent over the past year.