Perth’s property market has changed. Properties are taking longer to sell, buyers have more choice, and sellers can no longer assume every home will attract multiple offers within days.
But changing conditions do not equate to a market crash.
What we’re seeing is a correction from an exceptionally heated period when properties sold almost immediately, prices moved rapidly, and buyers often paid a premium simply to secure a home. Those conditions were not normal. They reflected a market operating under significant pressure.
How urgency pushed prices higher
Earlier this year, demand came from almost every direction. First homebuyers, investors, upgraders, downsizers and interstate purchasers were all competing for a limited pool of established homes.
At the same time, Perth’s population was growing faster than housing supply could comfortably absorb.
The Australian Bureau of Statistics reported Perth’s population increased by 58,088 people, or 2.4%, during the 2024-25 financial year, the highest growth rate of any Australian capital city. Figures for Perth are not yet released for 2025-26 but based on the WA population growth numbers, we can expect another year of solid growth.
While construction activity has improved, new supply takes time to reach the market. Western Australia recorded 24,223 dwelling commencements in the year to March 2026 and around 20,000 completions, with another 26,741 dwellings still under construction at the March quarter.
This imbalance between population growth and completed housing contributed to the urgency buyers experienced. Homes frequently went under offer before buyers could complete their research. Many feared missing out would mean paying more for a comparable property just weeks later.
As a result, some buyers paid a premium for certainty. Rather than focusing on what a property may have been worth months earlier, they focused on securing a home before prices moved again.
The Federal Budget changed sentiment
The 2026-27 Federal Budget interrupted that momentum.
Changes announced on 12 May 2026 limited negative gearing for future purchases of established residential property and replaced the 50% capital gains tax discount with cost-base indexation and a 30% minimum tax rate on capital gains. The measures take effect from 1 July 2027, with transitional protections in specified circumstances.
While the reforms did not change underlying housing demand, they altered investor behaviour. Many buyers paused to assess the implications, some lenders reassessed serviceability treatment of negative gearing, and investor participation softened.
Momentum Wealth’s internal reporting observed some lenders removing negative gearing benefits from borrowing-capacity assessments following the Budget announcement. It also showed listings increasing while sales volumes remained below year-earlier levels.
Importantly, this does not mean the market was suddenly flooded with distressed sellers. Rather, fewer properties were being absorbed each week. Unsold listings accumulated and added to new stock entering the market, pushing overall inventory higher.
Why listing numbers need context
For the week ending 6 September 2026, REIWA recorded 7,352 properties listed for sale across Perth, up from 6,852 four weeks earlier and 2,905 a year ago. Weekly sales totalled 699 transactions, comprising 498 houses, 118 units and 83 land sales.
A year-on-year increase of more than 150% can sound alarming in isolation.
However, the increase is being measured from an exceptionally low base.
Momentum Wealth Research has historically regarded around 13,500 listings as indicative of a balanced Perth market. At 7,352 listings, current stock levels remain only around 54% of that benchmark.
Buyers undoubtedly have more choice than they did a year ago, but Perth has not moved from shortage to oversupply. It has moved from an extreme shortage to a less severe one.
Longer selling times are relative
The same context applies to days on market.
Perth houses sold in a median of nine days in February 2026. By June this had increased to 18 days and by July to 23 days. Units were taking a median of 19 days to sell.
For sellers accustomed to immediate offers, that shift feels significant. However, several weeks on market is not evidence of distress.
Instead, buyers now have more time to compare options, complete due diligence and assess whether a property’s price reflects its location, condition and long-term value.
The changing market is also highlighting differences in quality.
When almost every property sells within days, distinctions between high-quality homes and those affected by location, layout, maintenance issues or unrealistic pricing can become blurred. In the current environment, those differences matter again.
Well-located properties that are well presented and appropriately priced continue to attract demand. Secondary properties are taking longer to sell, and sellers are increasingly having to respond to buyer feedback rather than relying on the conditions that existed earlier in the year.
Momentum Wealth’s August market commentary similarly found buyer demand remained strongest for quality properties in inner and coastal locations, while purchasers were taking more time before committing.
Price data points to a correction
Recent value data supports the view that Perth is experiencing a correction rather than an uncontrolled decline.
Cotality’s August 2026 Home Value Index showed Perth dwelling values fell 0.8% in August and 3.2% over the three months to 31 August. Even so, dwelling values remained 15.6% higher than a year earlier, with a modelled median value of $999,987.
Meanwhile, REIWA’s settled sales data showed Perth’s median house price reached $960,000 over the 12 months to August 2026, up 18.5% year-on-year.
These measures assess different aspects of the market. Cotality estimates value movements across the broader dwelling market, while REIWA’s median reflects the midpoint of properties actually sold, which can be influenced by the mix of sales occurring at a given time.
Together, they suggest short-term momentum has softened following a strong growth cycle, not that Perth property values have collapsed.
The underlying demand remains
The drivers behind Perth’s housing shortage have not disappeared.
Population growth remains strong, construction completions continue to improve, and housing stock remains well below levels historically associated with balance.
The rental market also remains tight.
REIWA data for July 2026 recorded a vacancy rate of 2.2%, below the 2.5% to 3.5% range generally considered balanced. For the week ending 6 September, Perth had 2,023 rental listings, compared with 2,211 a year earlier. Median asking rents remained at $750 per week for houses and $700 for units.
Lower investor participation does not reduce housing demand overnight. Over time, fewer investor purchases may restrict growth in rental supply. If tenant demand remains strong, upward pressure on rents and improving rental yields may eventually encourage some investors back into the market.
While recent tax changes have altered investment calculations, the need for rental housing remains unchanged.
A more rational market is not a bad market
Buyers and sellers became accustomed to extraordinary conditions.
Sellers expected multiple offers. Buyers felt pressure to make decisions within hours. Both groups increasingly viewed those conditions as normal.
They weren’t.
Today’s market gives buyers more time, more information and greater negotiating power. It also requires sellers to focus on presentation, realistic pricing and understanding local demand.
Some properties will inevitably retreat from the premiums achieved during the market’s most competitive phase. Some suburbs, particularly those heavily reliant on investor demand, may experience larger adjustments than tightly held owner-occupier markets.
But a reset in price expectations following a period of exceptional growth is not a crash.
It is a correction.
For buyers, this creates an opportunity to make better decisions rather than faster ones. For sellers, it means returning to the fundamentals. For investors, property still serves the same purpose it always has; providing housing, building wealth and supporting long-term financial goals. What has changed is the tax, finance and cash flow analysis required before purchasing.
The market has slowed. The need for housing has not.
Viewed in its entirety, Perth’s market looks less like a collapse and more like a market returning to normal conditions.
