Perth's property price explosion fuels investor FOMO

Perth is entering 2026 with a market dynamic that’s become rare in Australia: exceptionally low stock levels at the same time as prices keep pushing higher.

Buyers have very limited choice, and that shortage is one of the key reasons Perth has remained the country’s standout growth market.

Listings thin on the ground

The REA Group Listings Report shows Perth listings are materially tighter than a year ago:

• new listings in Perth were down 22.7 per cent year-on-year (January 2026 vs January 2025).
• total listings in Perth were down 29.5 per cent year-on-year — one of the sharpest reductions among the capitals.

Perth’s shortage now resembles (and in some measures exceeds) the tightest periods of the last decade-plus. Reporting that cites REIWA data notes Perth’s listing levels were last this low around 2010 (roughly 13 years earlier in that dataset), underlining how deep the supply squeeze has become.

Prices: strong growth where choice is weakest

PropTrack’s Home Price Index links this directly to performance.

Where buyers have had more options (Sydney/Melbourne), growth has softened. Where choice is limited (including Perth), growth has stayed firm.

PropTrack notes Brisbane, Perth and Adelaide continue to outperform amid “very limited choice for buyers,” with Perth up 0.6 per cent month-on-month in February and a staggering 19.5 per cent increase for the 12 months prior. This is the strongest growth of any capitals and regional markets.

And zooming out, Perth was also among the leading capitals over 2025, reinforcing that this isn’t a one-month story, it’s a sustained cycle shaped by supply constraints.

What’s driving the imbalance?

1. First-home buyer support is lifting demand

PropTrack highlighted in February 2026 that first-home buyer lending rose strongly into late 2025, and that markets including Western Australia recorded some of the strongest quarterly growth in first-home buyer lending.

They also point to national programs that reduce upfront barriers, including the expanded 5 per cent Deposit Scheme and the new Help to Buy shared-equity scheme that commenced late 2025.

At the state level, WA has also moved to improve affordability via stamp duty exemptions and concessions targeted at eligible buyers and certain new strata purchases. It’s another lever supporting demand, particularly for first-timers trying to bridge the deposit gap.

Why this matters: first-home buyers don’t just “add demand” — they often compete hardest for the same limited pool of well-located, entry-priced homes. When listings are already scarce, extra demand pressure shows up quickly in prices.

2. Big-ticket infrastructure: submarines and the defence pipeline

Perth isn’t only being pulled by housing policy. It’s also being pushed by jobs and investment, and the defence build-out is a meaningful part of that.

The Federal Government has committed $12 billion towards developing the Henderson Defence Precinct in WA to support continuous naval shipbuilding and the AUKUS pathway, with statements projecting around 10,000 direct jobs over the next two decades.

Defence also explicitly recognises Henderson’s role in supporting the nuclear-powered submarine pathway and broader fleet sustainment.

Reporting has highlighted that this investment arrives amid existing housing and skilled-worker constraints — exactly the mix that can intensify housing demand in key employment corridors.

The property-market effect: major, long-duration projects tend to create sticky demand — contractors, engineers, defence personnel, suppliers and their families don’t just “visit” the market; many settle into it. When housing supply can’t respond quickly, price pressure builds.

3. New builds can’t scale fast enough

The fastest way to relieve a housing shortage is usually through new supply but Perth, like much of Australia, is running into a construction reality that’s slower and more expensive than households assume.

Research into WA housing conditions in 2025 found construction delays have doubled average build times to 15.6 months, and rising costs have added up to $100,000 to a typical new home over four years.  

Anecdotally, we are speaking with builders on the ground in Perth metro and the build time, planning and development approval (DA) process and delays are resulting in three-year builds for a single dwelling.

That means even when buyers pivot to “build instead,” the market doesn’t get immediate relief. Delays also keep established homes in higher demand, because people who would normally build (or move) often stay put, further tightening resale stock.

4. A feedback loop: low listings, higher prices, fewer sellers

One of the most stubborn features of Perth’s current cycle is that the shortage itself discourages selling. When homeowners look around and see little to buy next, they delay listing, which keeps stock low.

This has created a logjam dynamic: owners hesitate because they can’t confidently secure their next home, and tight rental conditions can make bridging options unattractive.

When combined with strong yields and buyer competition, it becomes rational to hold and the shortage persists.

What it means for investors in 2026

Perth’s defining challenge is choice.

When new listings are down sharply and total listings are near decade-lows, competition can concentrate around well-priced, well-located homes, especially those that sit within first-home buyer budgets or scheme thresholds.

Many investors are now compromising on what they are buying just to get into the WA market.

The FOMO among east coast investors in particular is driving some bad buying decisions.

A large proportion are paying bullish prices that aren’t justified or supported by the local market, buying properties in ‘bad’ areas or assets that are low in quality and require a lot of work or upkeep – what we call ‘the money pit’ investment.