If you’re thinking about buying, refinancing, investing or reviewing your loan structure, now is a critical time to understand how interest rates and market dynamics are shaping opportunities, especially here in Perth. We have clients that are actively searching for a property who are continuing to miss out on properties as price growth shows no signs of cooling. If you’re looking to buy a property in Perth in 2026, here’s what you need to know now:
Interest Rates: RBA Has Turned Hawkish
After a long period of easing, the Reserve Bank of Australia has lifted the official cash rate to 3.85% as of February 2026.
Even more importantly:
• Markets and economists are flagging the real possibility of further rate increases in 2026 if inflation remains persistent.
• This reflects ongoing cost pressures in the economy, along with a robust labour market and strong demand metrics.
Traders are betting on at least one more rate increase from the central bank this year after the RBA underestimated the strength of the economy, consistently missing its inflation target.
What Higher Rates Mean for Borrowers in the Perth Property Market
• Borrowing capacity reduces: higher rates mean lenders apply tougher serviceability tests.
• Monthly repayments increase: even modest hikes can add hundreds to monthly repayment amounts.
• Property affordability becomes tighter: especially for first home buyers and lower deposit borrowers.
However, rates are just one piece of the story, and Perth’s property market fundamentals are still supporting strong demand.
Perth Property Prices: Still Running Hot
Despite tightening monetary conditions, Perth property market remains one of Australia’s strongest performing housing markets.
Recent market data shows:
• Western Australia (including Perth) is experiencing some of the highest annual price growth nationally, outperforming most other capital cities.
• Perth annual growth in dwelling values is significantly higher than the national average while some east-coast markets are moderating or flat, Perth continues to post strong gains.
What’s Driving This Intense Demand?
• Chronic low stock levels: Available listings remain scarce compared to buyer demand.
• Population growth and migration: More buyers are competing for too few homes.
• Investor interest: Perth property market still offers comparatively attractive affordability and rental yields.
• Lifestyle demand: Buyers priced out of Sydney/Melbourne see Perth as a more reachable entry point.
In other words, even rising interest rates haven’t stopped competition on the ground.
Supply Remains Limited Keeping Pressure on Prices
One of the key reasons Perth’s property market remains hot even in a higher-rate environment is supply constraints.
Industry commentary highlights that:
• A rate hike alone is unlikely to unlock meaningful supply, many sellers remain reluctant to list out of concern they won’t find a suitable replacement property.
• Limited supply keeps listings competitive and drives buyers to compromise on location or property type rather than step away from the market.
Put simply: higher financing costs are not yet overwhelming buyer demand.
What This Means for Different Buyer Types
First Home Buyers
You are still competing in a seller-favoured environment. Multiple offers are common, and properties can sell quickly.
Key priorities:
• Secure a pre-approval before making an offer.
• Lock in strategy around price bands you can afford with buffer for potential future rate increases.
• Be prepared to compromise on suburb or dwelling type if needed.
If you’re a first home buyer and wanting to give yourself the best chance of securing a property asap, go to our dedicated first home buyer loans page.
Owners with Fixed Rate Expiry
If you’re coming off a fixed rate, don’t assume:
• Your current lender will automatically offer the best ongoing rate.
• Rates won’t go higher before your refinance date.
Talk to a mortgage broker early. Sometimes even a small repricing or restructure can materially improve your financial position.
Investors
Perth’s rental markets still show strong fundamentals:
• Low vacancy rates
• Rising rents
• Healthy yield profiles relative to other capitals
But higher financing costs mean structure matters more than ever. Focus on:
• Offset strategies
• Interest-only vs principal & interest implications
• Diversification of lenders
So What’s the Big Picture Right Now?
Despite higher interest rates:
- Demand remains structurally strong in Perth
- Supply shortages are real and persistent
- Price growth is still robust compared to other cities
- Borrowers face tighter affordability but not outright market weakening
- In short: Perth is still a competitive property market, not a cooling one.
Higher interest rates don’t automatically mean price falls, especially when supply is low and buyer demand remains strong.
What they do mean is:
• You need a clear strategy, not guesswork
• You must build a buffer into your planning
• You should optimise loan structure as well as rate
If you’d like a personalised snapshot of your borrowing power or a loan strategy review, reach out to an experienced mortgage broker in Perth. The right structure now could save you tens of thousands over the life of your loan.
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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. The examples used here are illustrative in nature and do not reflect any actual people or clients.
