Trying to predict what lies ahead for house prices in Perth can feel like reading tea leaves. With the national market riding high, some areas show signs of cooling while others are still gaining ground. So, when we ask “Are house prices dropping in Perth?”, the short answer is: probably not dramatically – but don’t expect a runaway boom either.
Will Perth house prices drop in 2026?
Perth house prices are unlikely to drop in 2026. Strong population growth, limited housing supply, and ongoing demand are expected to keep prices stable or rising moderately. While interest rates and construction costs may influence trends, Perth’s market fundamentals suggest continued resilience rather than a downturn.
Looking ahead to 2026, the consensus among forecasters is for modest growth rather than a decline in house prices in Perth. Several market-outlook sources suggest increases in the range of 5% annually, assuming no major shock. In one forecast, the “base case” for 2026 expects houses in Perth to gain +5% to +8% and units +7% to +10%.
The reasons behind this include: ongoing population growth in WA, supply constraints in green-fields and infill housing, plus infrastructure investment creating new demand corridors. On the flip side, risks remain: interest rate increases, slowing migration or a surge in new housing supply could dampen pricing. Some forecasts list a “bear case” scenario where growth drifts to 0-2%.
Are house prices dropping in Perth?
Right now, Perth’s housing market is still showing upward momentum rather than decline. Experts point to tight supply, strong migration into Western Australia and solid economic fundamentals as tailwinds for further growth. For example, analysts note record-low vacancy rates and robust rental yields within the city, which keep demand elevated.
That said, some moderating forces are also in play. Affordability is becoming a constraint: as prices rise, fewer buyers can stretch further, and borrowing costs remain elevated. Several suburb-specific pockets show slower growth or consolidation rather than outright drops. So while a broad-based price fall across Perth seems unlikely, some segments may plateau or even decline slightly.
So what does this mean for home buyers?
If you’re a first home buyer, investor or planner in Perth, the takeaway is: don’t expect house prices to collapse in 2026, but also don’t bank on double-digit growth either. The safer assumption is steady, moderate price increases. That means focus on the right suburb and property type rather than expecting broad market jumps.
Buying in a location supported by infrastructure, with limited future supply, still gives you upside. But be mindful of affordability, and avoid over-stretching in a market that’s likely to moderate. For investors, look for homes with good rental yield and look for value where growth may outperform – rather than chasing hotspots that already appear over-priced.
Final Thoughts
In short: house prices in Perth are unlikely to drop sharply in 2026. The more realistic scenario is mild growth, tempered by the affordability boundary and tightening borrowing conditions. While no market is immune to unexpected shocks, Perth enters 2026 with strong fundamentals for stable performance – but not a dramatic boom or bust. If you’re planning a move or decision, align with that mindset and manage expectations accordingly.