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Perth’s housing market, which has led the nation in price growth for much of the last two years, slowed down in May, according to Cotality figures.
The Western Australian capital saw monthly prices ease from 2.1 per cent in April to 1.5 per cent in May. In November 2025, growth hit 2.9 per cent.
In Sydney and Melbourne, prices decreased by 0.9 per cent and 0.8 per cent, respectively.
For the quarter up to 31 May, prices grew by 4.8 per cent and 25.8 per cent for the year, still the strongest result of any capital.
According to Cotality, the median house price in Perth is $1,050,354, the third highest in the country after Brisbane and Sydney.
Diminished investor demand?
Following the announcement of the federal budget’s tax changes to negative gearing and capital gains tax, speculation has swirled as to how these changes will affect investor behaviour and demand.
Westpac’s chief economists have forecast a slump in investor activity of around 34 per cent in the short term, as well as an overall housing market turnover decline of 20 per cent.
They also predicted Perth’s prices to moderate, with about 13 per cent for the year.
Speaking on Broker Daily Uncut, Finni broker Costa Arvanitopoulos noted that the high levels of investors in the city could make Perth more susceptible to the budget’s changes.
“Price growth has almost halved there since November, which is interesting. Of course, there’s a lot of different factors that go into that, and the speed was changing before the announcement of the budget, but there are a lot of investors there,” Arvanitopoulos said.
“With the changes to serviceability and the median price over $1 million, it will be interesting to see where the market goes.”
Strong fundamentals
Adam Burstein, managing director of Core Finance, told Broker Daily that what he was seeing on the ground remained a strong market.
“Growth has certainly cooled compared to the pace we saw over the last couple of years, but I wouldn’t describe the market as slowing down in any meaningful way,” he said.
“People are definitely becoming a little more cautious with their decisions. I think that’s less about a lack of confidence and more about being budget conscious and not wanting to overcommit. At the end of the day, people still need homes and somewhere to live.
“WA continues to experience strong population growth, low rental vacancy rates and an ongoing shortage of housing, so demand remains healthy.”
Burstein said that it was too early to see the impact of negative gearing changes but noted that investor activity remains strong.
“Investors are certainly paying more attention to policy changes and seeking advice before making decisions, but I haven’t seen a noticeable drop in investor activity yet. Perth still offers relatively affordable entry prices and strong rental yields, which continue to attract investors,” Burstein said.
“As we deal heavily in the construction space, we’ve actually seen investors remain very active. Many are taking comfort in the fact that new builds have largely been excluded from the recently announced changes, which has kept interest levels strong in that segment of the market.”
Burstein said buyer behaviour had begun to shift, with purchasers taking more time to research properties and conduct due diligence before committing.
“Twelve months ago, a well-priced property could sell in a day or two. Now it might take a week or two. That’s still a very strong market by most standards,” he added.
Burstein said demand remained strongest for house-and-land packages and move-in-ready homes, with limited land supply and high construction costs continuing to drive buyer competition. He added that quality properties in Perth’s sought-after coastal suburbs were also achieving strong results.
“If there is one common theme, it’s that while overall supply is slowly increasing, quality supply remains the biggest issue. There are still more buyers than quality properties available in many parts of the market and, until that changes, I believe values will remain well supported,” Burstein said.
[Related: Why bridging finance is surging in WA’s property market]
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