Perth property prices have enjoyed an extraordinary period of growth, but the latest economic and housing data suggest that the market has reached a far more vulnerable stage of the cycle. The combination of deteriorating conditions in China, a weaker outlook for iron ore, higher Australian interest rates, reduced borrowing capacity, weakening buyer sentiment and a rapid increase in Perth properties for sale should now be taken seriously.
This does not necessarily mean Perth is facing a property crash. Strong population growth, low unemployment and an underlying housing shortage continue to provide support. However, the balance of power is shifting. The evidence increasingly points towards slower sales, greater buyer choice and downward pressure on prices.
For Perth property sellers, the practical conclusion is clear: price expectations based on the exceptional conditions of 2024 and 2025 may no longer be realistic.
Perth property prices are still substantially higher than a year ago, but annual figures are backward-looking. They describe where the market has been, not necessarily where it is heading.
Cotality’s June 2026 Home Value Index recorded Perth dwelling values increasing by 0.7 per cent for the month and 2 per cent over the quarter. Values remained 23.9 per cent higher over the year, with a median dwelling value of approximately $1.047 million. However, the rate of growth has slowed sharply.
Perth values had been increasing at an average monthly rate of approximately 2.5 per cent during the March quarter. By June, monthly growth had fallen to 0.7 per cent. Cotality also made material downward revisions to its earlier Perth results, confirming that the market was changing more quickly than initially measured.
Cotality attributed the broader housing slowdown to affordability constraints, higher interest rates, cost-of-living pressures, weak sentiment and changes affecting property investors. It also reported that advertised housing supply across the capital cities was almost 11 per cent higher than a year earlier.
Source: Cotality Home Value Index, July 2026
KPMG’s August 2026 Residential Property Market Outlook reached a similarly cautious conclusion about momentum. KPMG found that quarterly Perth house-price growth slowed to just 0.7 per cent in the June quarter, down 4.8 percentage points from the March quarter. This was the largest deceleration of any Australian capital city.
KPMG described the result as suggestive of an upcoming correction and noted that Perth’s recent rate of price growth was never sustainable in the long term because of affordability constraints. It also recorded a 0.8 per cent fall in Perth unit prices during the June quarter.
Although KPMG still forecasts Perth house prices to finish 2026 higher than they began the year, it expects growth to slow significantly. Its forecast is for Perth house-price growth of approximately 6.4 per cent in 2026 and 3.6 per cent in 2027—far below the recent annual growth rate.
Source: KPMG Residential Property Market Outlook, August 2026
In other words, even one of the more positive reputable forecasts expects the Perth property boom to slow dramatically.
The most immediate warning is not yet a dramatic fall in the published median price. It is the rapidly changing relationship between available stock and buyer demand. REIWA recorded 7,076 Perth properties listed for sale in the week ending 16 August 2026. That compares with only 3,167 in the corresponding week a year earlier.
Available stock has therefore increased by approximately 123 per cent in 12 months. At the same time, weekly property sales fell from 782 a year earlier to 601—approximately 23 per cent fewer transactions. That is a significant change in market conditions.
Buyers who previously had very few properties to choose from can now compare competing homes, take longer to make decisions and negotiate more firmly. Properties that are overpriced are increasingly likely to remain unsold while correctly priced homes attract the available demand. REIWA’s 12-month data places the Perth median house sale price at approximately $950,000, but the current increase in listings and reduction in turnover suggest that vendors should be cautious about relying on historical median-price growth when setting an asking price today.
Source: REIWA Perth market insights
ANZ has materially downgraded its Australian housing outlook. The bank now expects combined capital-city dwelling prices to experience a peak-to-trough decline of approximately 10.6 per cent. ANZ forecasts capital-city prices to fall 4.3 per cent in 2026 and a further 3.4 per cent in 2027 before recovering in the second half of 2027. Importantly for Western Australian property owners, ANZ says Perth and Brisbane began turning down earlier than it expected. ANZ forecasts a 5.2 per cent peak-to-trough decline in Perth dwelling prices.
The bank attributes the deterioration to restrictive interest rates, property tax changes, weaker sentiment, global uncertainty and rising property listings. It also notes that current auction clearance rates are consistent with annualised national price falls of around 10 per cent.
ANZ does not expect Perth prices to fall indefinitely. Limited housing supply and construction constraints should eventually create a floor under the market. Nevertheless, its forecast supports the view that Perth has moved beyond a simple slowdown and into a period where an actual correction is plausible.
Source: ANZ housing forecast reported by Australian Conveyancer
The difference between the ANZ and KPMG forecasts is also instructive. KPMG expects Perth prices to continue rising, but at a much slower rate. ANZ expects a 5.2 per cent correction. Neither expects the exceptional recent growth rate to continue. That range of reputable forecasts should be enough to persuade sellers that assuming another automatic 15 or 20 per cent increase would be speculative.
Perth property is more exposed to China than the housing markets of Sydney or Melbourne because Western Australia’s economy, government revenue and business confidence remain closely connected to the resources sector.
China’s July 2026 economic data show a pronounced slowdown:
The most concerning figures relate to Chinese property construction.
During the first seven months of 2026:
These are not the figures of a property sector undergoing a convincing recovery. They show that physical construction activity, the part of the Chinese economy most important to steel and iron ore, is continuing to contract sharply.
Source: China National Bureau of Statistics property data
China’s high-technology manufacturing sector is performing better, but AI equipment, electronics and semiconductors do not consume iron ore on the same scale as apartment construction, conventional infrastructure and heavy industry. China may still generate acceptable headline economic growth, but its changing growth model is becoming less iron-ore intensive.
Iron ore has remained remarkably resilient through several years of Chinese property weakness. However, the balance between supply and demand is becoming less favourable. Near-term Singapore iron-ore futures were recently trading around US$95 per tonne, close to their 52-week low of US$92.85.
Source: SGX iron-ore futures data
The demand outlook is weakening because Chinese steel production and property construction are falling. At the same time, global iron-ore supply is expected to increase through additional production from Australia, Brazil and Guinea. The Australian Government’s Office of the Chief Economist expects iron-ore prices to soften over the coming years as supply rises and Chinese steel output declines.
It forecasts Australian iron-ore export earnings falling from $117 billion in 2025–26 to $108 billion in 2026–27, before declining to approximately $77 billion in real terms by 2030–31. The government expects increasing steel production in India, Southeast Asia and the Middle East to offset some of China’s decline, but not sufficiently to prevent weaker iron-ore prices and lower Australian export income.
Source: Resources and Energy Quarterly, June 2026
A reasonable base case is for iron ore to trade within a broad US$80 to US$95 range over the next six to 18 months. A deeper Chinese slowdown could produce periods between US$65 and US$80. The major Pilbara producers remain highly profitable at those prices, so a moderate iron-ore decline would not automatically cause widespread mine closures or a Perth property crash. The risk is cumulative.
Lower iron-ore prices reduce mining profits, WA royalty income, contracting activity, employment growth, business investment and confidence. If sustained, those effects eventually feed through to household income, interstate migration and demand for Perth property.
China and iron ore represent an important second-stage risk, but Perth’s present slowdown is primarily being driven by domestic conditions.
The principal pressures are:
The Reserve Bank held the cash rate at 4.35 per cent in August after considering another increase. Its guidance left open the possibility of additional tightening if inflation remains too high. Even without another rate rise, the existing level of mortgage rates significantly limits the amount buyers can borrow. That makes it increasingly difficult for purchasers to meet asking prices based on past growth.
In a rising market with very little stock, sellers can price ahead of the evidence and allow competition between buyers to justify the result. That strategy becomes much less reliable when listings double and sales volumes fall. A property can be well-presented, well-located and professionally marketed but still fail to sell if the price is based on conditions that no longer exist.
Sellers should now distinguish between three different numbers:
Only the third figure determines current market value.
An asking price is not evidence of value. Nor is an isolated premium sale necessarily representative of the broader market. The most relevant evidence comes from recent comparable sales, current competing stock, buyer enquiry, inspection numbers, written offers and the length of time comparable properties remain unsold.
Vendors who respond early to market feedback generally preserve their negotiating position. Those who spend months chasing an outdated price risk helping competing properties sell first and eventually making a larger reduction from a weaker position.
Downgrading expectations does not mean giving a property away. It means pricing within a range that creates genuine competition between buyers before the listing becomes stale.
Perth still has significant structural support. Western Australia continues to experience strong population growth. Rental availability remains tight. New housing construction is constrained by high costs, labour shortages and limited development capacity. These factors should limit the depth and duration of a correction unless the labour market deteriorates substantially.
However, those supports do not make Perth property prices immune to economic cycles or affordability limits.
The latest evidence now includes:
Taken together, these indicators provide legitimate cause for concern.
The most likely outcome is not an immediate collapse. It is a more difficult and selective Perth property market in which accurately priced homes continue to sell while ambitious vendors face longer selling periods, fewer offers and eventual price reductions.
After several years in which sellers could expect the market to rise towards their asking price, the next phase may require sellers to move their expectations towards the market. That adjustment has already begun.
Andrew Huggins is Principal of Ray White Urban Springs, the top real estate agent in the City of Belmont for over 20 years. He writes about Perth property trends, WA real estate insights, Australian housing supply and demand, and long-term investment strategy.
When most people think about negotiation, they picture the moment an offer is presented. In reality, by then much of the negotiation has already taken place. The best results are often achieved long before the first offer arrives—by creating competition, gathering valuable buyer intelligence and ensuring prospective purchasers are emotionally invested in the property. This is where experience matters.
Auctions may be unnecessary when buyers are already competing in a hot market. As Perth conditions weaken and buyers gain more choice, however, a professionally conducted live auction can create the urgency, transparency and competition required to achieve the strongest possible result.