Key takeaways
Perth remains the strongest capital city market in Australia with home values rising 2.0% in January and the median property value increasing by approximately 19,000 dollars every month.
The unit sector has overtaken houses in annual growth reaching a 20.1% increase over the past year led by a massive 24.8% surge in the lower quartile segment.
Severe supply shortages continue to underpin the market as listings remain significantly below historical averages and new housing completions fail to meet demand.
Perth’s housing market remains the nation’s top performer, with home values rising by 2.0% in January.
Although the market is still booming, growth conditions have eased slightly from the cyclical high of 2.9% recorded in November last year.
At the current pace, the median property value in Perth is increasing by approximately $19,000 per month, reflecting the extreme imbalance between supply and demand.
The capital gains are being driven by a surge in the unit sector and low-end housing.
As affordability becomes a growing concern even in Perth, buyers and investors are aggressively targeting entry-level segments, leading to unprecedented annual appreciation in high-density dwellings.
Perth Market Performance
Perth continues to lead all capital cities in annual growth, with both houses and units recording substantial double-digit increases.
| Segment | Monthly Change (January) | Annual Change | Market Insight |
|---|---|---|---|
| All Dwellings | 2.0% | N/A | Median values are rising by ~$19k every month. |
| Houses | Strong | 18.4% | Sustained demand despite rising prices. |
| Units | Outperforming | 20.1% | Leading annual growth across all property types. |
Source: Cotality, February 2026
The Dominance of the Unit Market
[/notes]In a shift from historical trends, Perth’s unit sector is now driving the highest annual capital gains.[/notes]
Unit values surged by 20.1% over the past year, outpacing the 18.4% rise seen in houses.
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The most extreme growth is concentrated in the lower quartile of the unit market, where values have skyrocketed by 24.8% over the past 12 months.
This is currently the fastest-growing market segment in Australia, fueled by intense competition for affordable investment and entry-level options.
Inventory Shortage and Demand Drivers
The primary catalyst for Perth’s rapid price appreciation is a persistent and severe shortage of available housing.
| Metric | Current Condition |
|---|---|
| Advertised Stock (National) | 25% below 5-year average |
| New Construction | Completions tracking well below demand |
| Incentives | Supportive schemes for first home buyers |
Source: Cotality, February 2026
Supply-side constraints are expected to remain a significant factor throughout 2026.
With construction costs elevated and labour supply scarce, new projects are struggling to reach completion, leaving the established market under immense pressure.
Note: Additionally, incentives for first-home buyers are channelling even more demand into the lower quartile of the market.
Outlook and Headwinds
While Perth remains resilient, it is not immune to national economic pressures.
The 25 basis point rate hike in February and the introduction of APRA’s high debt-to-income lending limits are expected to temper buyer confidence.
However, given the city’s extreme supply deficit and relatively lower median values compared to the eastern states, Perth is likely to continue outperforming the national average, even as growth momentum slows toward a more sustainable pace.
