Why this glowing capital will lead the market in 2026 – realestate.com.au

It is the fastest growing capital of the past twelve months and new forecasts show the city will once again lead house prices in 2026. Real estate agents say there’s one big reason for that.

Despite being one of the most isolated capital cities in the world, Perth’s property market leads Australia when it comes to property price growth.

Home prices rose 15.5% to an average of $930,000 over the year through November, PropTrack data shows, and have nearly doubled in the past five years.

Together with Brisbane, the newest realestate.com.au Property Outlook Report predicts Perth will continue to lead the market in the coming year, with prices expected to rise between 7 and 10% in both capitals by 2026.

Anne Flaherty, senior economist at realestate.com.au and co-author of the report with Angus Moore and Eleanor Creagh, said population inflows, very tight rental conditions and a shortage of new homes will continue to put upward pressure on prices.

‘What we see in it [Brisbane and Perth] is that the rate at which new houses are built is not keeping pace with the rate at which the population is growing. These were also the fastest performing markets in 2025 and that momentum is likely to continue next year.”

“The most likely path is that Perth will continue to outperform the other capitals, but price growth will slow from the exceptionally strong pace recorded in 2024 and 2025,” Flaherty said.

PropTrack data shows that the ten best performing regions over the past 12 months were all in Queensland and Western Australia.

PropTrack senior economist Anne Flaherty.

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Perth property agent and director of Haiven Property, Sean Hughes, said while there was no doubt the Perth property market had not yet cooled, it was not “all beer and skittles” and some properties were taking longer to sell.

“I just don’t see this as a market where people are buying anything just for the sake of it,” Mr Hughes told realestate.com.au

“I think if you have a very generic four-by-two family house in Carine, say for $1.5 million, you should expect the experience – which much of the Perth market is in – where there are hordes of people queuing and 16 offers in the first weekend.”

Perth recorded the fastest growing property prices last year, and is predicted to remain the country’s leader in 2026. Photo: Getty

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However, it will take longer to sell more customized or unique properties, he said.

“I guess what I see in Perth is that the market is still quite two-speed. Basically one is a very fast pace, like getting a fine for speeding,” he said.

“The other is that you can race between speed bumps, but at some point you have to cover 50 km.”

Low mentions are a key factor

According to PropTrack, the number of active listings in Perth, Brisbane and Adelaide are down about 45% from pre-pandemic levels – a key factor behind these cities’ outperformance in recent years.

Real Estate Institute of WA president Suzanne Brown said price increases were likely to continue as long as demand was strong and listings remained at or near record lows.

“We have continued population growth, new home buyers are coming into the market thanks to the 5% deposit under the Home Guarantee Scheme; and we simply don’t have the housing stock to meet demand,” she said.

“People are not listing their homes due to concerns about securing a new place to live and the completion of new homes is not meeting pent-up demand.”

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Ray White Whiteman & Associates Mirrabooka sales associate Justin Merendino said he takes an average of seven days to market a home before it goes on the market.

With that scenario being the trend throughout 2025, Mr. Merendino said he didn’t see it changing anytime soon.

“The only way it’s going to go down and the days on market are going to get longer is more inventory. How do we get more inventory?” he said

“We need to build more because you give people more choice. I would like to see every house on the market. The problem is people are afraid to sell.”

Lacking choice, Merendino said people looking to upgrade or downsize were stuck, and looking ahead to 2026 he expected conditions to remain the same.

Despite a huge pool of buyers, Merendino said he had a strict policy of not selling homes off-market.

“Because an agent and my sellers agree with me, buyers get irritated because they’re not even allowed to walk through the house if you go off-market,” he said.

“You close the entire market to the seller, you close the market to the buyer. Why would we do that in the 3,000 market? In 15,000 maybe because everyone has a choice, but at 3,000 there isn’t enough choice.”

Brisbane is expected to experience growth in line with Perth by 2026. Photo: Getty

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Jonathan Marlow, CEO of Xceed Real Estate, said that due to the historically low number of listings, off-market sales were at the highest levels he had ever seen.

“It’s very difficult to argue against it on any deal,” he said. “What happens is you get an opportunity that comes on the market and they might get four or five off-market offers.”

As a result, he said off-market sales have created a “lack of visibility” in the market, causing significant reluctance among sellers to list their homes, which in turn fueled the shortage of listings.

“So it seems like a self-fulfilling prophecy,” he says. “We’re not sure we can say for certain where the end of this is.”

The areas leading the attack

Western Australia and Queensland have dominated the top ten price growth regions over the past year, according to PropTrack, with Perth’s north-east recently overtaking Townsville to become the hottest SA4 region in the country.

Prices in this pocket rose 17.4% over the year to November.

SA4 regions are defined by the Australian Bureau of Statistics and generally have a population of between 100,000 and 500,000 people.

Speaking to his office, Mr Marlow said buyer demand was strong across the board for the suburbs.

“Even the distant areas like Alkimos are really going crazy,” he said.

“We’re seeing areas like Balcatta, Stirling, Innaloo, Doubleview going crazy… Churchlands, and then even Westminster and Balga – there’s not really anything where I can sit there and go ‘this is [happening more in] a particular suburb.”

Mr Hughes said there is good demand in good value parts of Fremantle, as well as Applecross and South Perth.

“And then there are the coastal areas, up to Trigg and North Beach, which have remained quite warm over the last four or five years,” he said.

Looking ahead, Mr Hughes said he did not believe conditions for buyers would improve significantly.

“Unfortunately, I see the market will remain strong,” he said.

“I don’t see an abundance of offers coming onto the market. I don’t see the rate of construction and the number of homes being built slowing down.”

As a result, there was “buyer fatigue” in some parts of the market, Mr Hughes said, mainly due to tight rental terms and interest rates.

“In a way, it’s actually not that much cheaper, but it’s similar to buying or leasing something,” he said.

“If they’re going to spend $50,000 to $100,000 a year on rent, even if they spend less, say, $30,000 to $70,000 a year on the more affordable rent, they’re better off paying off their own mortgage on that.”