Perth property investors are facing a very different market

Perth still has strong long-term fundamentals, but the market has changed quickly. Investors should be cautious about expecting the type of growth the city delivered over the past few years, says Perth-based property investor and Managing Director of Dynamic Advisory, Matt Piotrowski.

Perth has been one of Australia’s strongest property markets in recent years, with low housing supply, strong population growth, rising rents and relatively affordable property prices driving significant growth across much of the city.

But the market investors are buying into today looks very different to 12 months ago.

In the same week last year, just 2,941 properties were listed for sale across Perth. By the week ending 13 September 2026, that had increased to 7,565 properties – a 157 per cent increase in available stock.

Weekly sales have also fallen from 756 to around 600, while median selling times have increased from approximately eight days to 23 days.

“Perth still has a lot of good fundamentals, but the market has clearly changed,” Mr Piotrowski said.

“Buyers have significantly more choice, properties are taking longer to sell, investor activity has reduced and affordability has become much more stretched.

“That is a very different environment to the one that produced the explosive growth we saw over the last few years.”

The warning signs started appearing in 2025

Dynamic Advisory had already started becoming more cautious on Perth during 2025.

While the broader market was still performing strongly, Mr Piotrowski said the firm was beginning to see small changes in the data suggesting the rate of growth was starting to soften.

“We already had reservations around parts of the Perth market in 2025,” he said.

“It wasn’t because Perth suddenly had bad fundamentals. We could just see small changes starting to appear in the data.

“At the same time, many suburbs had already experienced around 100 per cent or more in growth over the previous five years. You have to start asking how much future growth has already been brought forward.”

As prices continued to rise, Perth’s affordability advantage also began to reduce.

“When a market has effectively doubled in many areas over a relatively short period, you cannot just assume the next five years will look like the last five,” Mr Piotrowski said.

“At some point you need to reassess the value proposition and compare it with what is available elsewhere.”

Stock has been building

One of the biggest changes has been the steady increase in properties available for sale.

Perth previously had an extreme shortage of stock. Properties were often selling within days and buyers regularly had very few alternatives, helping create urgency, competition and FOMO.

Today, buyer activity and transaction volumes have eased, allowing stock levels to build, particularly in the detached housing market.

Rather than being caused only by a sudden surge in new listings, much of the increase appears to be coming from slower absorption combined with additional listings. Properties are simply taking longer to sell, meaning more homes remain available from one week to the next.

“When fewer properties are being absorbed by buyers, even normal levels of new listings can cause total stock for sale to rise quite quickly,” Mr Piotrowski said.

“That matters because Perth’s recent growth was heavily supported by extremely low stock and strong competition between buyers. As that balance changes, the pressure on prices naturally starts to ease.”

One of the biggest differences today is simply the amount of choice available to buyers.

“Twelve months ago, a buyer might have had two or three realistic options in a suburb,” he said.

“Today they may have 10 or 15.

“Once buyers have choice, they become much more selective.”

Properties that are well presented, correctly priced and located in tightly held areas may still attract strong demand.

But compromised properties, poorly located stock or homes priced above the market can sit for longer.

Affordability is becoming a bigger issue

Perth’s strong growth has reduced one of the city’s major advantages.

After several years of rapid price increases, many suburbs are considerably more expensive than they were at the beginning of the cycle, while affordability and rental yield compression are affecting the market.

“At some point affordability matters,” Mr Piotrowski said.

“Household incomes do not rise 20 or 30 per cent simply because property prices have.

“As prices move higher, fewer buyers can afford those properties and borrowing capacity starts becoming a much bigger constraint.”

This does not mean Perth has lost its underlying fundamentals. Population growth, employment, housing supply and the strength of the Western Australian economy remain important.

However, strong fundamentals do not necessarily mean strong short-term price growth.

“You can have a city with very strong long-term fundamentals and still have a market that is correcting in the short term,” Mr Piotrowski said.

“Those two things are not mutually exclusive.”

Some suburbs have already corrected

According to Mr Piotrowski, the correction is already visible in some parts of Perth.

In certain suburbs, individual properties are now transacting at more than 10 per cent below the levels comparable properties were achieving around the first quarter of 2026, before the Budget announcements.

“That does not mean Perth as a whole has fallen 10 per cent,” he said.

“It shows that some suburbs and property types have already experienced a meaningful correction.”

This is why looking only at a Perth-wide median price can sometimes hide what is happening at suburb level.

Different suburbs can be at very different stages of the cycle at the same time.

Perth is likely still going through a correction

Mr Piotrowski believes investors should be prepared for the possibility that Perth’s adjustment still has further to run.

“Our view is that we are probably still working through a correction rather than having already completed it,” he said.

“Stock levels are rising, buyers have more choice, transaction volumes have reduced, investor activity has eased and affordability is stretched.

“Those conditions do not point towards another year of explosive market-wide growth.”

That does not necessarily mean Perth is heading for a major downturn. Instead, conditions are likely to become increasingly different from suburb to suburb.

“I would be very cautious about looking at what Perth did last year and assuming you are going to get the same result next year,” Mr Piotrowski said.

“The explosive part of this Perth cycle is likely behind us.”

Simply buying in Perth is no longer the strategy

For investors, the biggest change is that Perth itself should no longer be the investment strategy.

During the strongest period of the cycle, broad market growth lifted almost everything, making it relatively easy for investors to generate strong returns even when the underlying property was fairly average.

“The market did a lot of the heavy lifting over the last few years,” Mr Piotrowski said.

“When almost everything is rising, even average properties can produce a good result.

“Once that broad growth slows, you start to see a much bigger difference between a quality asset and simply owning something in a city that had a strong run.”

Investors should now compare Perth with opportunities across the country rather than assuming their next purchase should remain in Western Australia.

“Smart investors are looking at more than one market.

“If another city or region is sitting at a different stage of its cycle, has better affordability or offers better value relative to its fundamentals, then it should be considered.

“Investing is not about being loyal to a postcode. It is about building the right portfolio over time.”

Quality owner-occupier homes may be more resilient

If investors or homeowners are still looking within Perth, Mr Piotrowski believes high-quality owner-occupier property is likely to be one of the more resilient parts of the market.

These are typically properties in tightly held suburbs with strong amenity, good streets, desirable school catchments and limited competing supply.

“If Perth does continue to soften, we believe quality owner-occupier homes are likely to be among the standout performers,” he said.

“There is a big difference between a property that somebody genuinely wants to call home and generic investment stock that can easily be replaced.”

Good owner-occupier property tends to have a deeper pool of buyers and genuine scarcity, which can make it more resilient when the broader market weakens. However, quality homes are not immune from a downturn.

Investors need to reset their expectations

Perhaps the biggest message for investors is to reset expectations.

Someone buying in Perth today should not automatically expect the type of growth the market delivered over the previous 12 months, or in some cases any growth.

“The last few years made investing in Perth look relatively easy because the overall market was doing so much of the work,” Mr Piotrowski said.

“That environment has changed.”

The question for investors is now broader than simply asking whether Perth is still a good market.

“We are not saying Perth has bad fundamentals.

“We are saying investors need to recognise where Perth is in its cycle and compare that with what is happening elsewhere.

“The explosive growth phase is likely behind us, affordability has been stretched and we believe the market is still working through a correction.

“There may still be individual opportunities, particularly in high-quality owner-occupier property, but smart investors should be looking nationally rather than assuming Perth remains the obvious place for their next purchase.”

For investors, the question is not simply whether to buy in Perth, but where a purchase fits within the overall portfolio and how exposure can be spread across different markets and stages of the property cycle.