April 30, 2026 — 3:00am
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Perth’s house prices have risen for another quarter in the longest uninterrupted stretch of growth since 2000-07, but there are warnings buyers could be hitting an “affordability ceiling” as looming tax changes take the shine off WA’s market for investors.
According to Domain’s latest House Price Report, released on Thursday, Perth’s house prices rose 5.7 per cent in the March quarter to record a median of $1.18 million.
Perth’s property market is on a hot streak. WAtoday
That marked 14 consecutive quarters of growth – not seen since the start of the millennium – while an annual growth of 24.6 per cent put the western capital well ahead of Australia’s other major cities as the fastest-growing housing market in the country.
Rampant demand and lagging supply is the simple equation pushing house prices higher, but Domain chief residential economist Dr Nicola Powell said buyers could soon be hitting the limit on what they were willing to pay for a roof over their heads.
“Obviously, the strong economic base and the higher average wage in Perth, the fact it also underperformed in the 2010s, kind of almost created that foundation for it to kind of get to this point where it’s over-performed,” she said.
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“But this has gone far beyond that, and I think shows the economic base and the economic resilience, but also how grossly undersupplied Perth’s housing market is, and also how it’s continued to benefit from what we describe as household formation, and that’s coming through as strong population growth, placing demand on housing.”
An east-west divide also appears to be opening up, with markets in Sydney and Melbourne recording their first quarterly declines since December 2022 and September 2024, respectively.
Powell said those markets were much more sensitive to interest rate changes – Sydney especially – and she predicted prices could continue to rise at double-digit rates in the west over the coming year.
“But I do wonder, are we at that tipping point where affordability limits are being reached?” she said.
“It’s also being squeezed by a higher cash rate, impacting borrowing power, also impacting serviceability, and also we’ve got renewed cost-of-living pressures.
“So all of these things you would think would help to take a little bit of steam at least out of this price cycle for Perth.”
Domain’s report was released the day after new Australian Bureau of Statistics data showed inflation had lifted to a near-three-year high due to a jump in the price of petrol and diesel.
However, fears of another rate rise were partially allayed by the underlying inflation rate recording a “moderate” increase of 0.3 per cent.
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Perth’s housing market had seen higher levels of investment activity, Powell said, which has acted as an accelerant to push prices higher.
She said the effects of looming changes to negative gearing and the capital gains tax discount would likely be seen in investor strongholds, and would have more of an impact on the rental market – which itself was already strained.
“And I think in terms of pricing, I think what we’ve got to remember is investors tend to go to locations that have high demand for rentals,” Powell said
“So I do think the impact is going to be minimal on aggregate level – city-wide level – but what we’ll probably see is, if we do see changes, and we do see a sell-off for investors, it will impact certain suburbs, and those suburbs will be those suburbs that have a high level of investment activity.”
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