GREATER Bunbury wiped almost two years of growth off of median house prices in 2008.

House prices for the December quarter dropped to levels not seen since 2006 and capped off a torrid year in the local housing market.

The Real Estate Institute of WA figures showed a quarterly drop in median house prices for Greater Bunbury of $7000, or 1.9 per cent, to $356,000.

This makes an annual fall of five per cent across Greater Bunbury.

Three suburbs suffered falls over four per cent for the quarter.

Carey Park dropped $14,000, or 4.8 per cent, to $280,000, Usher fell $15,000, or 4.8 per cent, to $300,000 and South Bunbury dropped $17,000, or 4.2 per cent, to $383,000.

Bunbury gained $18,000, or 3.4 per cent to $550,000 for the quarter. This was the second quarter of positive gains for the suburb.

REIWA Bunbury spokeswoman Roslyn Ierace said 2008 was one of the toughest years she had experienced.

“Those sorts of conditions had not been seen since the early 1990s,” she said.

“And I think we have been harder hit this time.”

Ms Ierace said it took some time for both sellers and agents to adjust to the conditions.

“It was a tough year,” she said.

“It took some time for just how bad it was to sink in.”

Ms Ierace said early signs indicated it was already picking up for 2009 and agents had experienced the best sales they’ve seen for 12 to 18 months.

“I think you will see the next quarterly figures reflect this,” she said.

While Ms Ierace was confident of a turnaround this year she said there was still some areas that would need to level out.

“I think we will see nice steady growth this year,” she said.

“Between seven and 10 per cent.”

Ms Ierace said the influx of first homebuyers and government initiatives, such as the first homebuyer’s grant, were putting some confidence back in the market.