Will Property Prices Fall in Perth?

What Investors Need to Know

Across Western Australia, buyer behaviour is beginning to shift in noticeable ways. At Xceed Real Estate, our daily market reviews show a consistent pattern emerging: enquiry levels have softened, buyer numbers have reduced, and offers are becoming more conservative. 

Recent transactions highlight this change. A property that previously attracted an offer of$860,000 – which later fell through, has since received a best offer of $805,000. Another property that received a $445,000 offer four weeks ago ultimately sold for $405,000, reportedly to the same buyer.

These examples are not yet reflected in public data due to the typical four‑to‑six‑week settlement lag, but they offer early insight into how buyers are responding to current economic and policy settings.

The Prediction

To understand the forces shaping this shift, several key data points have been reviewed:

  • Investor participation –  ABS data shows that 40.6% of new finance commitments in WA over the past year were from investors.
  • Preference for established homes – Historically, according to ABS data 80–85% of investors have purchased established properties.
  • Negative gearing reliance – ATO figures indicate that 59% of rental properties are negatively geared.
  • Transaction volumes – REIWA reports that weekly transactions are currently 16.6% lower than the week prior to the Federal Budget announcement.
  • Borrowing capacity – Recent interest rate increases totalling 0.75% have reduced borrowing power by approximately 7–8%.

If we take the inputs above and apply them to a hypothetical sample size of 1000 property purchases the reduction in total demand could be 19.1% 

The Perth Question

Perth has been one of Australia’s strongest‑performing markets in recent years, supported by population growth, tight rental conditions, and relative affordability. The key question now is how these new pressures will interact with Perth’s underlying fundamentals.

Will reduced borrowing capacity and investor hesitation outweigh the city’s structural demand? Or will Perth’s resilience continue to provide a buffer?

According to Jonathan Marlow, Chief Operating Officer – Sales at Xceed Real Estate:

“Perth has shown remarkable strength over the past few years, but no market is immune to shifts in sentiment and policy. What we are seeing now is not panic – it’s recalibration. The next four to six weeks of settlement data will be crucial in understanding where the market is truly heading.”

Opportunity in Uncertainty

Periods of transition often create both challenges and opportunities.

For sellers, understanding current buyer sentiment is essential to avoid mispricing or mis‑timing a sale. For buyers, reduced competition and increased negotiation power may present openings that were not available even a month ago. Investors may need to reassess assumptions around gearing, cash flow, and long‑term strategy.

As Marlow notes:

“Uncertainty doesn’t mean inaction. It means making decisions with better information. Those who stay close to the data will be best positioned to move confidently when the right moment comes.” 

The Western Australian property market is entering a period of adjustment. While early indicators point to a cooling in activity, the full impact will become clearer as more data emerges. At Xceed Real Estate, we remain committed to providing clear, fact‑driven guidance to help clients navigate these conditions with confidence. Anyone considering a property decision, whether buying, selling, or investing is encouraged to seek comprehensive advice and ensure they have the most current information available.

For further insights or tailored market assessments, please contact our office.