24 Oct Perth Property Market: What a Cooling Boom Means for Buyers and Lending
Perth’s property market has undergone a significant change after several years of rapid price growth and limited housing supply. While the market remains active, recent signs suggest that the pace of growth is moderating as affordability pressures, higher interest rates, increased listings and changing buyer sentiment begin to influence conditions.
For property buyers and investors, this shift is important because a cooling market does not necessarily mean that property has suddenly become affordable or that borrowing has become easier. The lending environment remains closely connected to income, interest rates, serviceability requirements and the price of available property.
Understanding how these factors interact provides useful context for anyone following Perth’s property and finance markets.
Perth’s Property Boom Is Losing Momentum
Perth experienced substantial property price growth throughout 2025 and into 2026. REIWA reported that the median Perth house price increased from $750,000 at the end of 2024 to $850,000 by December 2025, representing annual growth of 13.3%.
The rapid growth was supported by strong demand and a shortage of available properties. At the beginning of 2026, Perth continued to experience very low levels of housing stock, with total properties listed for sale significantly below the previous year’s levels.
Conditions have since changed.
By September 2026, REIWA data showed 7,804 properties listed for sale across Perth, compared with 2,841 at the same time a year earlier. The increase represents a substantial expansion in available stock.
More listings give buyers greater choice and reduce some of the urgency that characterised the earlier stages of the boom.
Longer Selling Times Signal a More Balanced Market
Another indication of the changing market is the amount of time properties are taking to sell.
Earlier in 2026, properties in Perth could attract strong competition and sell quickly. More recently, selling periods have lengthened as buyer activity becomes more measured.
Australian Broker reported in September that homes that had previously sold within days were increasingly remaining on the market for longer. Industry brokers also described a noticeable change in buyer sentiment, with more properties becoming available and the market moving towards a more balanced position.
This does not necessarily mean that Perth’s property market has entered a broad decline. Instead, it suggests that the conditions that supported exceptionally rapid price growth are changing.
A market can move from highly competitive to more balanced without experiencing a sharp fall in property values.
Affordability Is Becoming a Bigger Consideration
One of the key reasons behind the changing market is affordability.
When property prices rise faster than household incomes and borrowing capacity, the pool of buyers able to participate at higher price points becomes smaller.
The increase in Perth’s median house price during 2025 illustrates the issue. A median house price of $850,000 represented a significant increase from the previous year, while borrowing capacity did not necessarily increase at the same pace.
This creates an important distinction between property prices and borrowing capacity.
A buyer may see more properties coming onto the market, but that does not automatically mean the amount they can borrow has increased. Lending assessments continue to consider income, existing financial commitments, living expenses, interest rates and other factors.
For this reason, greater property choice and greater borrowing capacity should not be treated as the same thing.
Softer Lending Does Not Automatically Mean More Borrowing Room
Recent lending data provides further context.
Common Sense Finance reported that total new dwelling loan commitments fell by 5.4% during the June quarter of 2026, while investor loan commitments fell by 8.6%. At first glance, softer lending activity could appear to suggest that conditions are becoming easier for buyers.
However, a reduction in the number of loans being written does not necessarily mean individual borrowers have more capacity to borrow.
Lending volumes can fall because buyers are delaying purchases, investors are becoming more cautious, property prices are affecting affordability, or lending conditions are changing.
The distinction is important.
A slower lending market is not the same as easier lending.
A borrower still needs to meet the relevant lender’s serviceability and lending criteria, regardless of whether overall loan volumes are increasing or declining.
Interest Rates Continue to Influence Borrowing Capacity
Interest rates remain another important part of the equation.
The Reserve Bank of Australia has increased the cash rate to 4.60% in September 2026, making borrowing costs considerably higher than they were during the period when Perth’s property boom began gaining momentum.
Higher interest rates can affect both existing borrowers and prospective buyers. For new borrowers, higher rates can reduce the amount of debt that can be supported under lender serviceability assessments.
For existing property investors, increased interest costs can also change the ongoing cost of holding property.
This means the relationship between property prices and finance has become particularly important. Even if price growth slows, higher financing costs can continue to affect affordability.
More Listings Could Give Buyers More Time
The increase in Perth’s available housing stock does create a different environment for buyers.
During a period of severe undersupply, buyers may face intense competition for suitable properties. Limited stock can result in properties receiving multiple offers and buyers having less time to assess their options.
A market with more listings can provide greater opportunity to compare properties, locations and prices.
Current REIWA data illustrates the scale of the change. As at the week ending 27 September 2026, Perth had 5,452 houses, 1,652 units and 700 blocks of land listed for sale.
However, greater choice does not necessarily mean every property represents the same market opportunity. Conditions can vary significantly between suburbs, property types and price ranges.
Perth’s Rental Market Remains Relevant
The rental market is another factor worth monitoring.
Despite the increase in properties available for sale, rental conditions remain relatively tight. REIWA’s September data showed median weekly rents of $750 for houses and $700 for units across Perth.
Rental availability also remains limited compared with the number of properties being offered for sale.
This matters because property investors assess a range of factors when considering the financing and ongoing ownership of an investment property. Rental income is one component of that broader picture, alongside interest costs, property expenses, vacancy periods and lending arrangements.
The rental market therefore continues to form part of the wider Perth property discussion even as sales conditions become more balanced.
What Does a More Balanced Perth Market Mean for Property Finance?
A changing property market can alter the relationship between buyers, sellers and lenders.
When property prices are rising rapidly, borrowing capacity can become a limiting factor because buyers need progressively larger amounts of finance to purchase the same type of property.
As price growth moderates and listings increase, buyers may have more opportunity to compare properties and assess their financing requirements before committing to a purchase.
However, this does not remove the importance of lender criteria.
Different lenders can have different policies, assessment methods, loan products and approaches to individual borrower circumstances. The headline cash rate and national lending figures therefore only provide part of the picture.
For Property Finance Invest, understanding this interaction between the property market and lending environment is an important part of understanding Australia’s broader investment landscape.
A Market Shift Rather Than a Simple Market Decline
Perth’s property market appears to be moving away from the exceptionally fast growth experienced over the past several years.
More listings, longer selling times and affordability constraints are changing the dynamics between buyers and sellers. At the same time, higher interest rates and softer lending volumes are influencing the financing side of the market.
The current environment is therefore better understood as a transition towards more balanced conditions rather than through a simple assumption that Perth’s property boom has either continued unchanged or completely ended.
The latest REIWA figures demonstrate that demand remains active, with hundreds of properties continuing to sell each week. At the same time, the volume of available stock is now substantially higher than it was a year earlier.
Understanding the New Perth Lending Environment
The changing Perth property market highlights why property prices and borrowing capacity need to be considered separately.
A slower market can provide more choice without necessarily making finance easier. Similarly, softer national lending figures do not automatically increase an individual borrower’s capacity.
For buyers and investors, the lending environment remains shaped by several moving parts, including interest rates, income, lender serviceability requirements, property values, rental conditions and the availability of suitable properties.
After several years of exceptionally strong growth, Perth appears to be entering a different phase. More available stock and slower price growth may provide a more measured market environment, while affordability and financing costs remain important considerations.
For Property Finance Invest, these developments reinforce the importance of understanding both sides of the property equation: the property being considered and the finance supporting it.
As Perth continues to adjust from a period of rapid growth, monitoring listings, selling times, affordability, lending conditions and rental demand will provide a clearer picture of how the market is evolving.