It’s an interesting time for Perth property investors. On the one hand, everyone is still waiting to see the full impact from the RBA’s consecutive interest rate rises as well as the Federal Budget’s proposed changes to negative gearing and the CGT discount.
On the other hand, WA’s economy and population growth remain strong as interstate and international migrants continue to move here in droves, lured by the strong jobs market, long summers, and coastal lifestyle.
It’s two competing forces pulling the Perth property market in opposing directions.
See also: WA Suburb Profile
East and West: Two very different stories
Judging by the media headlines, the east coast markets have all but succumbed to the weight of rising interest rates and their slowing economies. The Federal Budget seemed to have been the final nail in the coffin as commentators are predicting property prices to fall in Sydney and Melbourne over the short term.
However, the outlook for WA is not so glum as the property market proves to be more robust.
Despite some softening in the Perth market, demand continues to outweigh supply on all key metrics.
While the number of properties listed for sale has jumped to just over 5,000, the highest level since November 2024, this remains significantly below what’s considered a balanced market. REIWA considers a market balanced where supply can comfortably meet demand of around 12,000 sales listings.
Similarly, selling times in Perth have also jumped since the start of the year, with the average time to sell a house increasing from nine to 14 days, and units from eight to 13 days.
However, while these numbers are rising, they are still a fraction of the pre-COVID median of around 50 days to sell a dwelling.
The rental market mirrors this picture. Perth's vacancy rate remains below the 2.5-3.5% range that REIWA considers balanced, and rental prices have held firm, with unit rents ticking slightly higher since the start of 2026.
So how is all this playing out on the ground?
Price for your suburb
For our investor clients with variable rate mortgages, higher repayments from rate rises are a real consideration, and some landlords are looking to adjust rents to help offset the additional costs.
This is a legitimate response to changing financial conditions. And in a market where vacancy rates remain tight, there is still the ability in many suburbs to increase rents.
However, the market does push back in suburbs where supply is more readily available, so pricing a rental property correctly for its specific location is critical.
For example, in one northern coastal suburb, rents for a 4-bedroom, 2-bathroom home are up $40 to $50 per week compared to six months ago. However, in a southern coastal suburb, rents have softened by $30 to $40 over the same period.
Impacts from the Federal Budget
Most investors are across the headline changes to negative gearing and capital gains tax announced in the 2026-27 Federal Budget. What is less widely understood is that these changes do not apply to new builds.
Investors purchasing a property that qualifies as a new build will continue to have full access to negative gearing and will retain the choice between the existing 50% CGT discount or the new indexation arrangements when they sell.
With this in mind, we may see a shift in investor behaviour.
With tax concessions still available on new builds, we anticipate stronger investor interest in house-and-land packages – a trend that has already been building, particularly among interstate investors from Melbourne and Sydney seeking better yields than their home markets currently offer.
For investors considering this strategy, it's worth understanding the suburb-level rental dynamics carefully.
Quite often, house-and-land packages are located on the urban fringes where new supply can be added relatively easily compared to inner-ring locations.
That additional stock can weigh on both rental yields and capital growth, compared to inner-ring locations where supply is more constrained.
Where to from here
Despite interest rate rises and changes to tax settings, the Perth property market continues to be underpinned by fundamentals the eastern capitals don't currently share:
- A strong resources-driven economy
- Population growth that continues to run ahead of housing supply, and
- A rental market still in landlord territory
The tug of war is real. But based on the current evidence, WA's underlying strengths are holding their ground.
For investors, the key is to stay informed, differentiate the east-coast-centric headlines from what’s happening in WA, price your property accurately for its location, and seek advice before making any decisions about your portfolio.
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