Perth house prices have plunged to 2006 levels, with new data showing few signs of improvement.

A joint study by CoreLogic and Aussie Home Loans found Perth’s housing market had been in “an entrenched downturn” since mid-2014 and had already slipped lower this year.

However, the study has also revealed the financial benefits of owning a house close to the city.

Homes in many suburbs within 10km of the CBD have improved in value over the past 10 years, many about 20 per cent.

Real Institute of WA president Damian Collins said it was a matter of supply and demand.

And while most people preferred to live close to the city, it also made financial sense.

“Obviously there is relatively good demand for suburbs close to the city, with its better amenity, close to schools and public transport, close to cafes,” he said. “But, at the same time, supply is quite low. Supply in some of the outer suburbs, with new housing estates opening up, is far greater.”

The study found Perth buyers were in the housing driver’s seat, with the average selling time increasing to 63 days.

But rental markets had tightened a little, suggesting population growth that could lead to an overall improvement in housing demand.

Nineteen of Perth’s 20 most affordable suburbs had median house prices of less than $300,000. Six of the suburbs were in the City of Kwinana and five were in the City of Armadale. Topping the list was Medina, with a median value of $232,639.

Within 10km of the CBD, the cheapest options were West-minster ($366,534) and Nolla-mara ($371,826).

Eight of Australia’s top 10 cheapest homes were in WA regional towns, topped by Mt Magnet ($37,497), Laverton ($39,923), Meekatharra ($40,433) and Morawa ($41,569).