Key takeaways
Perth home values surged 2.4% in November, maintaining its position as the strongest capital city market, despite a slight easing from the 2.7% recorded in October.
The market is defined by a severe supply/demand disconnect, with advertised stock levels holding more than 40% below the long-term average, fueling rapid price appreciation.
At the current rate of growth, the median house value in Perth is projected to rise above the $1 million mark by January 2026.
Perth home values surged 2.4% higher in November, adding approximately $5,000 per week to the median dwelling value. While this marks the highest growth rate among all Australian capital cities for the month, the pace of growth eased slightly from the 2.7% recorded in October. Perth continues to be the national leader in value growth, driven by a profound and persistent imbalance between supply and demand.
Supply and Demand Disconnect
Note: The severity of Perth's housing supply shortage is the defining feature of its market, creating a severe disconnect between the number of available homes and buyer activity.
The current rate of growth suggests Perth's median house value could potentially rise above the million-dollar mark by January next year:
| Market Indicator | Status (November 2025) |
|---|---|
| Monthly Value Growth | 2.4% |
| Advertised Stock Levels (vs. Average) | 40% below average |
| Estimated Home Sales (vs. Average) | 2.6% above average |
Source: Cotality, December 2025
National Headwinds and Outlook
Despite Perth's exceptionally strong performance, the market is subject to broader national headwinds that will eventually impose a ceiling on growth.
These challenges include record unaffordability and serviceability constraints, which are deflecting demand towards the lower price points across most national markets:
| Economic Factor | National Status (September Quarter) |
|---|---|
| National Dwelling Value-to-Income Ratio | 8.2x (Record High) |
| % Gross Income for Mortgage Service | 45% (Near Record High) |
Source: Cotality, December 2025
Upside factors—persistently low supply, government stimulus for first home buyers, and strong investment credit growth—are currently outweighing these risks.
Note: However, the magnitude of future value growth is likely to be limited by rising serviceability barriers as credit becomes less available.
Regulatory Environment
The recently announced 20% limit on high Debt-to-Income (DTI) ratio lending, while unlikely to significantly slow price growth on its own, serves as a clear message that the regulator (APRA) is on alert for rising household debt. A more overt policy adjustment, such as a renewed investment credit growth speed limit, would have a more substantial impact, particularly since investors comprise around 41% of national home lending.
Overall, housing values in Perth are expected to continue rising through 2026, but the pace of gains will eventually slow as worsening affordability and serviceability constraints take effect.
