The shocking suburbs set for a leap in costs when rates of interest drop, in response to new analysis by CoreLogic | USAEMALL.com

Bayswater and Bassendean are among only a handful of suburbs set for a property price boost if interest rates drop as expected in the next few months.

While lower rates generally mean buyers can borrow and spend more — which tends to boost property prices — property analysts CoreLogic expects only seven house markets and seven unit markets in Perth will be affected.

The company’s head of research Eliza Owen said a huge surge in property prices in recent years had meant that most suburbs had already hit their peak — reducing the impact of an interest rate cut.

She said any increases across the broader Perth market this year would likely be as a result of mining, global commodity prices and population growth rather than a decision by the Reserve Bank of Australia to slash the cash rate.

However, she expects the broader Australian market to be much more sensitive to RBA decisions, with expectations of an average 6.1 per cent jump in property value for each one percentage point decline in the cash rate.

Based on historical values after interest rate changes in the 2010s, CoreLogic expects houses in Bayswater and Bassendean will experience the biggest upswing. A one per cent cut to the cash rate could see property’s there rise by 3.1 per cent.

This is followed by houses in Perth City (1.1 per cent), Serpentine-Jarrahdale (1 per cent), Fremantle (0.9 per cent), Canning (0.9 per cent), Cottesloe-Claremont (0.7 per cent), and Cockburn (0.7 per cent.)

Unit markets affected by the same cash rate cut include Bayswater-Bassendean (up 5.6 per cent) followed by Mundaring (2.9 per cent), Mandurah (1.9 per cent), Fremantle (1.2 per cent), Cottesloe-Claremont (1.2 per cent), Perth City (1.2 per cent) and South Perth (1.2 per cent).