Perth’s property market has been breaking records for more than two years straight and if we’ve recently been speaking to clients who had ben waiting for the bubble to burst before purchasing a property. Although, we can guarantee anything either way, the data currently suggests that falling prices in Perth are not on the horizon.

Despite stubborn inflation and cost-of-living pressure, Perth continues to outperform every other capital city in Australia. Prices keep rising, competition remains fierce, and homes are selling in record time. But it can’t continue this way forever…can it?

At Base Home Loans, we’re always watching the market closely on behalf of our clients, and the indicators are clear: there are strong reasons why Perth property prices are unlikely to fall anytime soon.

If you want to get to the crux of the matter now – Perth is entering 2026 as one of Australia’s strongest and most resilient housing markets – high demand, limited supply and strong migration trends, and there is little economic data to suggest that there will be any significant change anytime soon.

If you were waiting for things to head south before making any decision to buy, that could be a costly decision and one that requires careful analysis for your own unique situation and goals.

Here’s what’s really driving the market and what it means for buyers, sellers and investors.

1. A Chronic Undersupply of Homes

The number one factor keeping Perth prices elevated is simple: we don’t have enough homes.

Listings remain at some of their lowest levels on record. Even as more new housing is being delivered, it’s nowhere near enough to meet demand. Several forces are contributing to the shortage:

• Construction delays and builder insolvencies have slowed the pipeline of new homes.
• Labour and material shortages have pushed build times far beyond normal.
• Land releases are happening more slowly than the rate of population growth.
• Many existing homeowners are holding onto their properties because buying again in a rising market feels too risky.

When supply is this tight, even small increases in demand can push prices higher. Right now, demand is anything but small.

2. Population Growth and Migration Are Surging

Perth has become a magnet for overseas arrivals, but also for east-coast Australians chasing affordability and lifestyle.

Migration is now one of Perth’s strongest long-term price drivers. Why?

• Perth is significantly more affordable than Sydney, Melbourne and Brisbane.
• WA’s job market is strong, especially in mining, construction, healthcare and technology.
• Many workers relocating to WA have high incomes, allowing them to compete strongly in the housing market.
• Returning expats and interstate families are adding to buyer pressure in popular suburbs.

Population growth doesn’t just increase demand for housing — it increases demand for every type of housing: rentals, established homes, and new builds.

Which brings us to our next point.

3. A Very Tight Rental Market Is Fueling Buyer Demand

Perth’s rental market remains one of the tightest in the country, with vacancy rates hovering around historical lows.

This has several effects:

• Renters are experiencing steep rent increases and are beginning to see buying as a more stable option.
• Investors are drawn to the strong yields and low vacancy risk, which supports ongoing demand for investment properties.
• Some tenants are choosing to buy earlier than planned because renting is becoming less affordable and less secure.

A tight rental market creates a feedback loop: tough renting conditions push renters into buying, which reduces buyer supply and feeds price growth further.

4. WA’s Economic Fundamentals Are Strong

Unlike some parts of Australia that rely heavily on one or two sectors, WA’s economy is proving resilient. Key factors include:

• A robust resources sector that continues to underpin wages, employment opportunities and domestic migration.
• Low unemployment, which boosts consumer confidence and borrowing capacity.
• Large-scale infrastructure investment, increasing the appeal and accessibility of more suburbs.
• A rising median income that helps support demand even with higher interest rates.

Where there is stable employment and rising wages, there tends to be stable demand for housing.

5. Investor Interest Isn’t Slowing Down

Perth is now one of Australia’s most sought-after markets for investors — and not just local ones.

Interstate investors continue to target Perth because:

• Yields are higher than in most east-coast capitals.
• Vacancy rates are extremely low.
• Growth prospects remain strong.
• Entry prices are comparatively low, making Perth accessible even for first-time investors.

This extra layer of demand puts further upward pressure on prices, especially in the $450k–$700k bracket, which is popular with investors and first-home buyers alike.

6. Buyer Psychology and Market Momentum

Property markets often respond not just to economic data, but to confidence.

Right now, confidence in the Perth market is high:

• Buyers fear “missing out” more than they fear overpaying.
• Sellers feel no pressure to discount heavily because demand is strong.
• Media coverage continues to highlight Perth’s growth leaders, reinforcing the perception that the market is rising.
• Homes are selling quickly, which further validates price expectations.

When both buyers and sellers believe prices will keep rising, that momentum becomes self-reinforcing.

7. Even Potential Risk Factors Don’t Point to a Crash

Could the market cool? Yes — and at some point, it will need to.

But cooling is very different from falling.

Possible moderating factors include:

• More new housing supply coming online over the next few years.
• Interest rates stabilising (or eventually easing), which could reduce urgency and steadiness of demand.
• A gradual return to more normal listing volumes as people regain confidence to sell and upgrade.

However, none of these factors point to a sharp decline in prices. Most indicate a softening of growth, not a reversal of it.

The only scenario that could significantly shift prices downward would be a major economic shock and even then, Perth’s low supply and high rental demand would likely cushion the impact.

So… What Does This Mean for Buyers, Sellers and Investors?

If you’re a buyer or first-home buyer

Waiting for the market to fall may not be a winning strategy. Perth is more likely to see moderating growth than falling prices. If your finances are strong and the right property appears, it may make sense to move sooner rather than later. We have a dedicated first home buyer page here for everything you need to know about buying your first home.

If you’re a homeowner thinking about upgrading

In a rising market, the key is to sell and buy within the same market cycle. With prices still climbing, upgrading now could help you avoid being priced out of your next step.

If you’re an investor

Perth continues to offer a rare combination of yield, growth and affordability. But as always, strategy matters — suburb selection, rental prospects and loan structure are key. Check out our investor page here for more information about investment loans.

Perth’s property market is being driven by long-term structural forces: population growth, tight supply, a very strong rental market and resilient economic conditions. These fundamentals aren’t changing quickly.

While the pace of growth may ease over time, all indicators suggest that Perth is not on the brink of a price downturn.

For anyone considering buying, refinancing or investing, now is a good time to get clarity around your borrowing capacity and strategy.

Need Expert Guidance in This Market?

At Base Home Loans, we help buyers and investors navigate Perth’s fast-moving property market with the right advice, lender strategy and structure.

If you’d like personalised guidance from an experienced mortgage broker, a borrowing capacity update or a strategic finance plan for 2025, we’re here to help.

Book a free chat with us today.

Disclaimer: The information provided on this blog is for general informational purposes only and does not constitute financial or professional advice. While we strive to provide accurate and up-to-date information, mortgage laws and regulations can change, and individual circumstances may vary. We recommend consulting with a qualified financial advisor or mortgage broker to assess your specific situation and needs. Base Home Loans is not responsible for any actions taken based on the content of this blog. Always conduct your own research and consider seeking professional advice before making financial decisions.