Perth\u2019s housing market is continuing to defy expectations deep into 2026, with property values surging even as compounding external stressors weigh on markets.<\/p>\n
New data from Cotality shows Perth dwelling values jumped 1.5 per cent in May, lifting the city\u2019s median home value to about $1.05 million and making it the strongest-performing capital city market in the country.<\/p>\n
A combined barrage of higher interest rates, cost-of-living pressures and new investor tax changes have moved against property prices this year as Australia\u2019s broader housing market begins to slow. <\/p>\n
For new buyers on the east coast, the figures are a sliver of hope after years of extreme acceleration. Combined capital city dwelling values slipped 0.1 per cent over the month, with Sydney and Melbourne continuing to weaken amid affordability pressures, higher borrowing costs and softer buyer demand. <\/p>\n
But several areas in Western Australia continue to buck the trend. In regional areas outside Perth, dwelling values rising 1.9 per cent in May, more than triple the national regional growth rate. <\/p>\n
Unit prices in regional WA recorded some of the strongest gains, climbing 3 per cent over the month. <\/p>\n
The strength of Perth\u2019s market is particularly intriguing given expectations that recent federal budget changes targeting property investors would cool demand.<\/p>\n
Mortgage broker Loan Market Group reported investor lending through Perth brokers fell 22 per cent in the week after the Budget announcements compared with the previous four-month average.<\/p>\n
Despite that, prices have continued climbing.<\/p>\n
Cotality said demand-side pressures were building, including tax changes, higher interest rates and broader cost-of-living concerns. However, the firm noted housing supply remains severely constrained, with elevated construction costs and project feasibility challenges continuing to limit new stock. <\/p>\n
\u201cEven where approvals and commencements have risen, this upswing is yet to flow through to a material rise in completions,\u201d the report said. <\/p>\n
Population growth and tight rental markets are also continuing to support underlying housing demand, despite signs of investor activity easing. <\/p>\n
Housing Minister Clare O\u2019Neil said Treasury expected the Budget\u2019s housing measures to have only a modest effect on prices, arguing the changes were designed primarily to improve affordability and help renters transition into home ownership.<\/p>\n
\u201cPut your best offer forward, there may not be a second opportunity,\u201d Singh said. <\/p>\n
Those warnings now sit alongside fresh evidence that a drop in investor lending following the Federal Budget has not yet translated into lower prices. It has reinforced concerns that chronic housing shortages, population growth and constrained construction activity remain the dominant forces driving prices in the capital higher by the week.<\/p>\n
Perth\u2019s runaway property market has been building for months, with multiple forecasts warning the city was increasingly diverging from the rest of the country.<\/p>\n
Earlier this year, the Real Estate Institute of Western Australia predicted Perth house and unit prices could rise by as much as 20 per cent in 2026 if current trends continued. REIWA president Suzanne Brown said Perth was experiencing \u201cstrong demand\u201d while new listings remained below long-term averages. <\/p>\n
News.com.au previously reported Perth homeowners could effectively be \u201cearning about $500 a day\u201d through property value growth as prices surged \u201cbeyond expectations\u201d, even as higher interest rates and economic uncertainty weighed on buyers. <\/p>\n
The city\u2019s affordability crisis has also become increasingly visible at ground level.<\/p>\n
In a separate report on first-home buyers, Perth real estate agent Aman Singh described fierce competition and rapidly rising prices as the \u201cnew normal\u201d, warning buyers many properties were selling tens of thousands of dollars above asking price. <\/p>\n
\u201cPut your best offer forward, there may not be a second opportunity,\u201d Singh said. <\/p>\n