Thinking of waiting for the Perth property market to cool down? You could be in for a long and expensive wait.
With Perth’s market showing no signs of slowing, our latest analysis points to another year of supercharged growth, driven by a deep structural housing shortage that will take years to correct.
Here’s what our experts are forecasting for 2026 and, most importantly, what it means for your strategy.
Our prediction for 2026: Another 10% surge
On the numbers we’re seeing, we expect dwelling values to rise a further 10 per cent next year, with rents to increase around 4 per cent as vacancy remains near zero.
Based on this momentum, we predict the median price for all dwellings (houses and units combined) will cross the $1 million mark in 2027.
This call is backed by the market’s powerful performance over the past 12 months.
According to Cotality data, Perth’s median dwelling price rose 7.5 per cent in the 12 months to the end of September to $855,267.
The forces behind the forecast
Perth’s relentless property growth is underpinned by one core issue: a massive supply deficit.
Properties are selling at record speed, with Cotality reporting a median of 12 selling days for houses in September, because the pool of available homes is critically low.
Even after allowing for new builds, demolitions and redevelopment, our analysis shows the Perth market is 15,000 short and the WA market (including Perth) is around 18,000 dwellings short.
The ABS reported WA’s population grew at a nation-leading 2.3 per cent over the year to March, as people respond to a resilient economy, strong employment and relative affordability compared to the east coast.
That flow of new households is landing in a market that cannot deliver enough dwellings.
Despite more than 22,000 dwellings under construction in early 2025, labour constraints, rising costs and material delays have pushed home completions below what they need to be to keep up with demand.
Until supply catches up with demand, upward pressure on values will persist.
The rental market is telling the same story
Active listings are down nearly 30 per cent year-on-year, vacancy is at historic lows and rents rose 5.6 per cent over the year to September.
With migration still adding households faster than we can bring rentals to market, we’re forecasting a further 4 per cent rise in rents across 2026.
For investors, that supports cash flow. For would-be buyers sitting in the rental market, it raises the cost of waiting.
Why acting now is crucial
We often hear, “I’ll wait for the market to cool.” In a structurally undersupplied market, that can be a costly strategy. With values gaining so rapidly, buyers who act now can secure significant equity growth before the market eventually rebalances.
Key considerations for buyers in this market:
- Be decisive: When properties attract multiple bids and sell within days, being finance-ready and clear on your criteria is essential.
- Don’t compromise on quality: In an undersupplied market, resist the temptation to buy a lesser quality asset. Focus on properties in established suburbs close to schools and transport.
- Weigh up build vs. established: New construction can suit certain strategies, but timelines and potential holding costs need careful assessment. For many buyers, established properties provide more immediate exposure to growth and rental demand without build-time risk.
If you’re building a portfolio, a disciplined buy-and-hold approach remains a proven path in structurally undersupplied markets. As equity builds, it can be strategically leveraged to scale into additional assets, provided your finance structures and risk buffers suit your personal circumstances.
Navigating the risks
While the outlook is strong, it’s important to remain disciplined. Cost-of-living pressures are real, and while borrowing capacity has improved with interest rate cuts, the loans and repayments are larger simply due to the entry price points.
While further rate cuts are widely expected in 2026, they’re likely to be gradual.
Construction delays and cost escalations are still working through the system. WA’s economy is resilient, but not immune to shifts in global commodity demand or geopolitical shocks. None of that changes the core settings, but it does reinforce the basics:
- Stress-test your finances at higher rates.
- Maintain sensible cash buffers.
- Don’t chase an asset that doesn’t meet your personal goals, plan or risk appetite. Let your plan choose the property, not the other way around.
Your next move
In this market, preparation and expert selection do the heavy lifting. Our 2025 forecast of 9 to 11 per cent growth across all dwellings is on track, and we are confident the drivers are in place for another 10 per cent in 2026.
But the cost of waiting has also gone up.
If you’d like to discuss the 2026 outlook or refine your investment plan, get in touch with our team. We’re here to help.
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