The drop is on top of a similar fall in the March quarter and means the average price of a home in Perth has fallen about $30,000 since the start of the year.

REIWA President Rob Druitt says the cooling market may continue to slide for the rest of the year, but should reduce the likelihood of another interest rate rise.

"Certainly this is a strong indicator the Reserve Bank that the heat is out of the property market," he said.

"2008 will certainly prove to be the year where the market has corrected. We're anticipating into 2009 and 2010 and onwards that we'll see a return to a more normal market."

Mr Druitt says that means more people are opting to rent investment properties instead of selling them, so there's more accommodation available.

"The rental market has definitely cooled, we're still tight in some segments, but generally we're seeing a vacancy rate of three percent, bearing in mind that's come up from a low of one percent," he said.