Key takeaways
Perth fell 1.2% in September, its fifth consecutive monthly decline and the fourth straight month of losses above 1%, taking values 6% below the April peak and roughly $62,000 off the median property value.
The market remains up 10.1% over the past twelve months despite five months of sustained falls, a contradiction that reflects how large the pre-April gains were and how rapidly conditions reversed afterwards.
Perth now carries the largest supply increase of any capital city at 60% above year-ago listings, created entirely by properties failing to clear rather than vendors rushing to sell, with sales volumes down 19% and national selling times stretching from 23 days to 39 days.
Perth presents the strangest set of numbers in the country right now.
Values fell 1.2% in September, the fifth consecutive monthly decline and the fourth straight month of losses exceeding 1%.
Since peaking in April, the market has shed 6%, taking roughly $62,000 off the median property value.
And yet Perth is still up 10.1% over the past twelve months.
Double-digit annual growth in a market that has been falling hard for five months straight. That contradiction captures exactly how violent the turn has been: the gains banked before April were large enough that half a year of sustained decline has not yet erased them.
The supply picture explains the rest. Perth listings are now 60% higher than a year ago, the largest increase of any capital city in the country.
For a market that spent two years with stock levels so depressed that buyers had almost nothing to choose from, that is not a gradual normalisation. It is an inversion.
Transaction volumes have collapsed alongside.
Perth sales are running 19% below year-ago levels, and on the national annual comparison the city ranks third for sales contraction at -24.2%, behind Brisbane at 27.2% and Sydney at 26.5%.
The three markets that boomed hardest are now the three where buyers have withdrawn most completely.
Perth Market Performance
Perth's September figures describe a market in the middle of a rapid repricing rather than a gentle cooling.
Four consecutive months of losses above 1% is a pace matched by few capitals in this cycle.
| Segment / Metric | Current Result | Trend & Context |
|---|---|---|
| Monthly Change (September) | -1.2% | 5th consecutive decline; 4th straight month below -1% |
| Decline Since April Peak | -6.0% | Approximately $62,000 off the median property value |
| Annual Change | +10.1% | Still double-digit despite five months of falls |
| Advertised Listings | +60% vs. year ago | Largest supply increase of any capital city |
| Home Sales Volume | -19% vs. year ago | Third sharpest annual contraction nationally at -24.2% |
| National Context | 97% of capital suburbs falling | Perth no longer an exception to the downturn |
Source: Cotality, October 2026
The Problem With Building a Boom on Empty Shelves
Perth's five-year run was extraordinary, and it rested on a foundation that was always going to be fragile: there was nothing to buy.
When listings sit far below any reasonable benchmark, even a modest pool of active buyers produces compounding price growth.
Scarcity does the work. But scarcity is not demand, and the distinction only becomes visible when buyers step back, at which point the mechanism reverses with startling speed. That is precisely what the numbers now show.
Sales down 19% meant properties stopped clearing at the rate that had kept the listings pool artificially thin.
Stock accumulated. Within five months Perth went from acute shortage to 60% more listings than a year ago, the steepest supply swing in the country.
Note: Perth's listings rose 60% while new listings nationally fell 9.2%, the supply here was created entirely by properties failing to sell, not by vendors rushing to the exit.
Nationally the same arithmetic applies. New listings across the capitals are 9.2% below year-ago levels while total inventory sits 23.1% higher, because average selling times have stretched from 23 days to 39 days.
Each property occupies the market seventy percent longer, and the backlog compounds from there.
The Rental Market Finds an Unexpected Release Valve
After years of relentless tightening, national rental conditions have started to ease, and the way it happened reveals something about where tenants have reached their limit.
The vacancy rate climbed to 2.1% in September, up from February's record low of 1.5% and the highest since January 2025.
It sits well under the pre-COVID decade average of 3.3%, but the trend has reversed for the first time in years.
The counterintuitive part is that this loosening occurred while investment activity fell sharply, which should tighten the rental pool, not expand it.
The explanation points to demand rather than supply.
Weekly rents are up around $200 over five years and rental affordability sits at the worst level on record.
Households are responding structurally: consolidating into larger groups, moving toward multi-generational arrangements, taking smaller properties further from the centre.
- Also read:Perth housing market update | October 2026
- Also read:Sydney housing market update | October 2026
- Also read:Melbourne housing market update | October 2026
- Also read:Australian housing market update | October 2026
- Also read:Latest Property Price Forecasts. Australian Property Market Outlook 2026-2027: Navigating a Market Correction
Fewer separate tenancies creates vacancies without a single new dwelling being added.
Monthly rent growth slowed to 0.3% seasonally adjusted, the smallest monthly rise since May 2025, with annual growth easing to 5.5%.
| Rental & Investment Metric | Current Status & Trends |
|---|---|
| National Vacancy Rate | 2.1% — highest since January 2025, up from 1.5% in February |
| Monthly Rent Growth | 0.3% — smallest monthly increase since May 2025 |
| Annual Rent Growth | 5.5% — easing from earlier peaks |
| 5-Year Rent Increase | Approximately $200 per week above 2021 levels |
| National Gross Rental Yield | 3.85% — highest since August 2019 |
| Average Days on Market (Capitals) | 39 days — up from 23 days a year ago |
Source: Cotality, October 2026
Gross yields nationally have reached 3.85%, the strongest since August 2019, and should keep climbing while rents rise against falling values.
Perth has historically carried yields above the national figure.
But the gross number flatters the position: high interest costs stacked on rising insurance, maintenance and management fees keep neutral cash flow out of reach for most new entrants, and Perth's recent capital losses have removed the growth component that previously justified the shortfall.
Fifteen-Year-High Rates Against Freshly Leveraged Buyers
The Reserve Bank has lifted the cash rate to its highest level in 15 years, and Perth carries a specific vulnerability to that decision.
The city attracted an enormous volume of buyers during its boom, many of them financing near the top of an 80%-plus growth run, assessed on serviceability calculations built around lower rates.
Those households are now facing materially higher repayments on properties that have fallen 6% since April.
The equity buffers from the boom years remain substantial, but the cash flow pressure is immediate.
The structural point applies nationally. Rates last reached this level when household debt relative to income was far lower.
Today's borrowers are considerably more sensitive to each increment of tightening, which means the same nominal rate exerts a heavier drag than it did fifteen years ago.
Borrowing capacity contracts, serviceability tests tighten, and existing mortgage holders absorb larger repayments, all alongside rising living costs and negative real income growth.
Tip: Perth buyers have 60% more properties to choose from than a year ago and nearly double the time to decide, after two years of properties selling before inspections finished, the leverage has fully reversed.
Affordability has improved only modestly despite the fall, because the preceding boom was so large.
Values remain high relative to household incomes, deposit thresholds are significant, and deeply pessimistic sentiment continues to delay the kind of commitment a home purchase represents.
The federal budget's less favourable negative gearing and capital gains tax settings compound this, reducing investor demand in a market that drew substantial interstate investment capital throughout its growth phase.
What Sits Beneath Perth
Two structural factors are working to contain rather than accelerate the decline.
The labour market has held reasonably stable, underpinning household income security and limiting the risk of rising mortgage arrears or forced sales.
Western Australia's resource-linked employment base has generally been resilient, and a meaningful deterioration would be required to change the outlook materially. There is no sign of that yet.
New housing supply remains persistently short.
High construction and infrastructure costs, limited capacity and challenging project economics continue to restrict completions.
Even where approvals and starts improve, long development timelines mean any increase takes years to translate into finished homes, providing price support wherever advertised supply stays low.
Perth also retains the deepest equity cushion of any capital.
A decade of exceptional growth means the overwhelming majority of local owners sit far above their purchase prices, which materially reduces the risk of distressed selling regardless of how far this correction extends.
The balance of risks has nonetheless shifted downward.
Further falls are the most likely outcome while rates stay elevated and sentiment stays cautious.
The variables worth watching are how long rates hold at current levels, whether the labour market softens materially, and how quickly buyer confidence begins to rebuild.
