The change is not being driven by one factor alone. It results from several forces arriving at the same time: higher property values, tighter borrowing conditions, changing tax rules, elevated interest rates, stronger rental demand and, in Perth, a rapidly changing balance between available properties and underlying population growth. For investors, this creates a market that is far more complicated than it was just a few years ago. 

• The Federal Government’s 2026 Budget has added another major variable. From 1 July 2027, negative gearing will be limited to new-build residential property. 

Existing arrangements will remain unchanged for properties already held before Budget night, while investors buying established residential property after Budget night will still be able to offset losses against residential property income and carry unused losses forward, but will no longer be able to use those losses against other income such as wages. Investors buying eligible new builds will still be able to deduct losses against other income. That distinction is already changing the investment conversation.

At the same time, the Australian Bureau of Statistics recorded an 8.6% quarterly fall in new investor housing-loan commitments in the June quarter of 2026, with the value of investor commitments falling 10.2%. The ABS described the fall in investor loan numbers as the largest quarterly decline since September 2022. Yet Perth remains one of Australia’s most compelling housing markets from a demand perspective.

• REIWA’s latest data, updated on 8 September 2026, puts Perth’s median house price at approximately $960,000, with a median house rent of $750 per week.
• The median unit price is approximately $690,000, while median unit rent is around $700 per week. Rental conditions remain relatively tight.
• Perth’s vacancy rate was 2.2% in July 2026, below REIWA’s broad balanced-market range of 2.5% to 3.5%. Meanwhile, Western Australia remains Australia’s fastest-growing state by population.
• ABS data shows WA’s population increased by 2.2% in the year to December 2025, adding approximately 65,500 people.
• REIWA reported 7,335 properties advertised for sale at the end of August 2026, up 7.8% from July and a remarkable 146.1% from August 2025. Active listings had more than doubled since March.

Perth’s sales market is changing rapidly. Put it all together, and the real story is not simply that Australian property investors are “pulling back”.

The latest REIWA data places the metropolitan median house price at around $960,000. A buyer entering the market today therefore faces a very different capital requirement from someone who purchased several years ago. Interest rates are also materially important.

• The Reserve Bank of Australia left the cash rate at 4.35% in August 2026, following three increases earlier in the year. 
• The RBA said financial conditions had tightened following those increases and noted that inflation remained elevated. Then there is lending regulation.
• APRA’s high debt-to-income lending limits allow banks to have no more than 20% of new investment lending at a DTI of six times income or higher. 

At the same time, the mortgage serviceability buffer remains at three percentage points. And finally, there is the tax change. Investors now have to consider whether the property they buy today will still fit their desired tax strategy once the new rules take effect in 2027. That is a major change in the decision-making process. Perth property investors are being forced to become more selective about what they buy, how they finance it and whether an established property or a new home offers the better long-term investment proposition. For Perth investors, this could be one of the most important strategic shifts of the current property cycle. There was a time when the property-investment formula could be relatively simple.

• Buy an established house.
• Borrow against it.
• Collect rent.

Use negative gearing to manage the tax consequences of holding the property. Wait for capital growth. In a rising market, even an average property could produce an acceptable result if the broader market was moving quickly enough. The Perth market is now expensive by its own historical standards.

Whether you’re buying or selling, Expert Property Management in Perth can help you achieve the best results.

The Federal Budget Has Changed the Established vs New-Build Decision

The most important policy development for Australian property investors in 2026 is the Federal Government’s negative-gearing reform. The Government says negative gearing will be limited to new builds from 1 July 2027, with the stated objective of directing tax support towards additional housing supply. The important detail is that this is not a blanket abolition of negative gearing. There are three distinct situations.

Existing properties already held before Budget night.

• Existing arrangements remain unchanged.

Established properties purchased after Budget night

• Investors can still deduct residential property losses against residential property income and carry unused losses forward. 
• Still, they can no longer deduct those losses against unrelated income such as wages.

Eligible new builds

• Investors buying eligible new residential property can still use negative gearing against other income.

This creates an important relative advantage. It means that two properties with identical rents, identical prices and identical finance costs could eventually have different after-tax outcomes depending on whether one qualifies as a new build. That does not automatically make new property a better investment. But it does make the new-build category substantially more relevant to investors planning beyond 2027. 

The ABS numbers are hard to ignore. In the June quarter of 2026:

Housing finance indicator	Quarterly change
Total dwelling loan commitments	-5.4%
Owner-occupier commitments	-3.3%
Investor commitments	-8.6%
Value of investor commitments	-10.2%
First-home-buyer commitments	-2.9%

The number of investor loans fell by 4,966 during the quarter. Annual growth in investor loan numbers slowed from 19.4% in the March quarter to just 2.8% in June. But it would be wrong to interpret it simply as:

• “Investors are leaving property.”

A better interpretation is:

• “Investors are reassessing the economics of property investment.”

That distinction matters enormously for Perth. Investors are dealing with:

• higher entry prices; 
• higher financing costs;
• stricter serviceability;
• changing tax treatment;
• increased uncertainty around established property;
• stronger competition for suitable new builds.

The result is likely to be a market in which investors purchase fewer properties but spend more time deciding which properties deserve their capital.

The investor pullback would be considerably more concerning if Perth’s rental market were simultaneously weakening. REIWA’s July 2026 vacancy rate for Perth was 2.2%, compared with 2.1% in June and 2.4% in July 2025. REIWA considers approximately 2.5% to 3.5% to represent a balanced rental market. That puts Perth below the level generally associated with a balanced market. The implication is straightforward:

• There are still fewer vacant rental properties than you’d normally expect in a balanced market.

This matters because investors ultimately own housing that someone has to occupy. Perth’s rental market strength is therefore an important counterweight to the decline in investor lending. The market is sending two different signals:

Sales market

• More choices.
• More listings.
• Slower demand.
• Greater negotiating power.

Rental market

• Vacancy remains relatively low.
• Rents remain elevated.
• Tenant competition remains significant.

This is exactly why the Perth market is so interesting for investors. The sales market is becoming more balanced while the rental market remains comparatively tight.

Perth’s Median House Price Has Reached a New Level

REIWA’s latest metropolitan data shows:

Houses	$960,000
Units	$690,000
House rent	$750/week
Unit rent	$700/week

These figures represent transactions and rental data through August 2026, with the REIWA data updated on 8 September 2026. The $960,000 median is significant not just because Perth homes are expensive. It changes the investment mathematics. At a $960,000 purchase price, a 20% deposit is about $192,000, before transaction costs and other acquisition expenses. An investor does not necessarily need to buy at the Perth median. The median demonstrates the direction of the market. The investment opportunity increasingly lies in identifying micro-markets where the price-to-rent relationship, future supply and underlying demand remain attractive. That is where suburb-level analysis becomes more valuable than the headline Perth median.

One of the biggest developments of 2026 is not the median price. It is the return of choice. REIWA reported that Perth had 7,335 properties advertised for sale at the end of August 2026. That represented:

• 7.8% growth from July;
• 146.1% growth from August 2025;
• more than double the level recorded in March 2026.

This is a major shift from the extreme shortage conditions that characterised earlier parts of the Perth cycle. But there is an important nuance. The increase reflected easing demand and longer selling times. Still, it also noted that new listings had largely returned to longer-term averages after unusually low levels in late 2025 and early 2026. In other words, the market should not automatically be described as a distressed-seller market. Instead, it is becoming a more normalised buyer environment. That is good news for investors.

When listings are extremely low, buyers tend to make compromises. They may:

• accept a higher price;
• overlook a poor floor plan;
• overlook maintenance requirements;
• compromise on location;
• accept an inferior block;
• compete aggressively at auction.

A market with more listings changes that. Investors can now compare several properties before committing capital. That means the next stage of the Perth market could reward negotiation rather than speed. An investor can potentially say: “This property is attractive, but the comparable sales do not support the asking price.” That conversation becomes much harder when only a handful of competing properties are available.

More listings don’t guarantee falling prices. But it can improve the investor’s negotiating position. A sophisticated buyer should now be asking:

• How long has the property been listed?
• Has the asking price changed?
• How many comparable properties are available?
• What did similar homes actually sell for?
• How quickly are comparable homes leasing?
• Has the property previously failed to sell?
• Is the seller an owner-occupier, investor or developer?
• Are there defects or maintenance issues?
• Is the vendor’s price based on current evidence or last year’s market?

This is where local market knowledge becomes increasingly valuable.

Also read: Australian Rental Vacancy Rates Improve After 4.5 Years, Yet Relief Could Be Short-Lived

Western Australia’s Population Growth Is the Foundation Under the Rental Market

Perth’s rental story is inseparable from WA’s demographic growth. ABS data shows Western Australia recorded 2.2% annual population growth to December 2025, the fastest rate among Australia’s states and territories. The state’s population increased by approximately 65,500 people, reaching about 3.08 million. This is one of the strongest structural arguments supporting Perth housing demand. More people ultimately mean more households. More households mean more demand for:

• houses;
• apartments;
• townhouses;
• units;
• rental properties.

But population growth should not be treated as an automatic guarantee of capital growth. The key question is: Where will these additional households live? That is where the supply story becomes critical.

The WA Government’s updated Perth strategy is designed to accommodate a population of 3.5 million people by around 2050. The framework plans for:

• approximately 800,000 additional homes;
• approximately 1.2 million additional jobs.

Importantly, the plan is not based solely on expanding the urban fringe. Almost half of the 800,000 additional homes — at least 380,000 — are planned through increased density around transport hubs, activity centres and existing suburbs in the Central sub-region. This has a major implication for investors. Perth’s future property market will not be built entirely around traditional detached houses on large blocks. The city is expected to accommodate substantial growth through:

• infill;
• higher-density housing;
• transport-oriented development;
• townhouses;
• apartments;
• smaller-lot homes.

That creates both opportunities and risks.

An investor considering a new property should not ask only:

• “Is this suburb growing?”

The better question is:

• “How much new housing will compete with my property?”

Imagine two suburbs.

Suburb A

• Population growth:
• 10,000 additional residents.
• New dwellings:
• 3,000.

Suburb B

• Population growth:
• 10,000 additional residents.
• New dwellings:
• 8,000.

Both suburbs are growing. But their investment dynamics differ significantly.

• Suburb A may experience stronger competition for existing rentals because household growth is outpacing new housing.
• Suburb B may experience greater rental competition because new housing is arriving much faster.

This is why the supply pipeline matters.

New Homes Are Becoming More Attractive — But Investors Must Avoid the New-Build Premium Trap

The tax changes make new builds more attractive. But that doesn’t mean investors should buy every new home offered. The biggest risk is overpaying. Consider a simplified example:

	Established home	New home
Purchase price	$800,000	$900,000
Weekly rent	$700	$750
Annual rent	$36,400	$39,000
Gross yield	4.55%	4.33%

The new property costs $100,000 more. But it produces only $2,600 more gross rent per year. The new property may still have advantages:

• lower initial maintenance;
• depreciation benefits;
• modern tenant appeal;
• better energy efficiency;
• potential tax advantages under the future rules;
• potentially stronger resale appeal.

But the investor must quantify those benefits. A tax advantage should improve the economics of a good property. It should not justify an inflated purchase price. There are several reasons.

• Tax treatment: Eligible new builds remain the preferred category under the Federal Government’s negative-gearing reform.
• Lower initial maintenance: A new dwelling generally does not begin its investment life with decades of accumulated wear and tear.
• Tenant appeal: Modern kitchens, bathrooms, appliances, air-conditioning and layouts can make a property easier to market.
• Depreciation: New construction can provide depreciation opportunities, subject to the investor’s circumstances and tax advice.
• Policy direction: The Federal Government is explicitly directing tax support towards new housing supply.

These factors create a structural reason for investors to investigate new housing. But the market still needs to answer one question: How much will investors have to pay for that advantage?

The tax change does not commence until July 2027. That does not mean investors will wait until July 2027 to change behaviour. Property markets respond to expectations. A buyer considering two properties today may already be thinking:

• “If I am going to hold this property for ten years, how will the tax treatment look after July 2027?”

That can influence the demand for:

• house-and-land packages;
• newly constructed houses;
• new townhouses;
• apartments;
• small-lot homes;
• eligible off-the-plan projects.

The impact could therefore appear progressively rather than suddenly.

Four Perth Markets Investors Should Watch — For Different Reasons

Rather than producing an endless list of “best suburbs”, it is more useful to compare four different investment propositions.

1. Armadale: Lower Entry Price and Rental Yield

REIWA’s September 2026 profile places Armadale’s median house price at approximately $700,000, with median house rent around $630 per week. The suburb recorded approximately 20.7% annual sales-price growth and 6.8% rental-price growth. The simple gross yield calculation is:

• $630 × 52 ÷ $700,000 = approximately 4.68%

That is attractive compared with many higher-priced markets. But the investment case should not stop there. An investor should examine:

• street-level demand;
• transport;
• property condition;
• tenant profile;
• future development;
• redevelopment opportunities;
• comparable sales.

Armadale demonstrates the potential of the affordability-and-yield strategy. It does not automatically make every Armadale property a good investment.

2. Ellenbrook: Growth, Rental Demand and Infrastructure

Ellenbrook offers a very different proposition. REIWA reports:

• median house price: $850,000
• median rent: $750/week
• annual sales-price growth: 18.9%
• annual rental-price growth: 7.1%.

The indicative gross yield is approximately:

• $750 × 52 ÷ $850,000 = 4.59%

Ellenbrook is particularly interesting because it demonstrates how capital growth and rental demand can coexist with significant future housing development. The key investment question, then, is not whether Ellenbrook is growing. The question is:

• Can future population and employment growth continue to absorb new housing supply at a rate that supports rents and property values?

That is the more useful question for a long-term investor.

3. Aveley: A Strong Rental Proposition, But Price Still Matters

REIWA’s latest Aveley figures show:

• median house price: $860,000
• median rent: $775/week
• three-bedroom median: $800,000;
• four-bedroom median: $950,000.

The gross yield based on the suburb median is approximately:

• $775 × 52 ÷ $860,000 = 4.69%

The interesting part is the rental level. At $775 per week, a four-bedroom property can appeal strongly to family tenants. But investors should compare rent carefully against the purchase price. If one property costs $900,000 and another comparable property costs $820,000, the extra $80,000 needs to produce something meaningful. That might be:

• better land;
• superior location;
• better floor plan;
• stronger tenant appeal;
• renovation quality;
• scarcity.

The new-build investor should never pay simply for newer finishes.

4. Belmont: Location and Scarcity Become More Important

Belmont represents a different investment proposition. REIWA’s latest figures show:

• median house price: approximately $928,500
• median house rent: approximately $780/week
• annual sales-price growth: 22.9%
• annual rental-price growth: 7.6%
• Approximately 6 km from Perth.

The indicative gross yield is around:

• $780 × 52 ÷ $928,500 = 4.37%

Belmont is more expensive than Armadale, but investors are paying for a different set of fundamentals. The suburb’s proximity to Perth, established commercial facilities, transport connections and mature infrastructure creates a different supply proposition from outer growth corridors. The key concept is location scarcity. You can build a new house in a growth corridor. It is much harder to recreate a well-located established suburb close to the CBD.

The important lesson is not: Buy Armadale or Ellenbrook or Aveley or Belmont. The lesson is that Perth investors use different investment models.

Suburb	Investment proposition	Approx. gross yield	Main question
Armadale	Affordability + yield	~4.68%	Does demand support long-term value?
Ellenbrook	Growth + new housing	~4.59%	Can demand absorb future supply?
Aveley	Family rental demand	~4.69%	Is the purchase price justified?
Belmont	Established location	~4.37%	Does scarcity support resilience?

Suppose an investor purchases an $850,000 property and receives $750 per week. 

• Annual gross rent: $39,000
• Gross yield: 4.59%

It sounds reasonable. But then the investor pays:

• interest;
• property management;
• council rates;
• insurance;
• maintenance;
• water charges;
• vacancy costs;
• strata, if applicable;
• land tax, where applicable;
• other ownership expenses.

The actual cash return can be considerably lower. This is why investors should stop asking: “What is the gross yield?” and start asking: “What is the net cash position after finance and ownership costs?”

Interest Rates Are Still One of the Biggest Risks

The RBA cash rate remains at 4.35% following the August 2026 decision. The RBA said inflation remained too high and that financial conditions had tightened following three rate increases earlier in the year. For a leveraged investor, the important number is not the cash rate itself. It is the mortgage rate. Consider a hypothetical $680,000 loan at 6% interest.

• Annual interest: $40,800

Now compare that with a property renting for $750 per week.

• Annual gross rent: $39,000

Before paying a single dollar of:

• council rates;
• insurance;
• maintenance;
• management;
• vacancy costs;

The gross rent is already below the illustrative annual interest expense. That does not automatically make the property a bad investment. Capital growth, depreciation, tax treatment and future rental growth may all matter. But it shows why a property with a gross yield above 4% can still be materially cash-flow negative.

From February 2026, APRA’s debt-to-income lending limits allow banks to have no more than 20% of new investment loans at a DTI of six times income or higher. The same 20% limit applies to owner-occupier loans. APRA has also retained the three-percentage-point mortgage serviceability buffer. This matters for investors trying to build large portfolios. Strong past capital growth does not automatically translate into unlimited borrowing capacity. Investors still need to satisfy:

• serviceability;
• income requirements;
• existing debt obligations;
• credit limits;
• bank assessment criteria.

The days of assuming that rising property prices will automatically fund the next acquisition are becoming less reliable.

How much property can I comfortably hold through different market conditions? That is a much better question. A resilient investor should be able to withstand:

• temporary vacancy;
• higher interest costs;
• unexpected repairs;
• slower rent growth;
• slower capital growth;
• changes in tax treatment.

A property that only works when everything goes right is not a resilient investment. One of the most common weaknesses in property investment analysis is starting with the property rather than the tenant.

• Instead, ask: Who will rent this property?

A four-bedroom family home near schools has a different tenant market from a one-bedroom apartment near employment and transport. A townhouse may attract:

• professional couples;
• young families;
• downsizers.
• A smaller apartment may attract:
• singles;
• students;
• young professionals.

The investment case strengthens when the property meets a genuine housing need.

WA’s population grew by 2.2% in the year to December 2025, but population growth is not distributed evenly across every suburb. That is why an investor should investigate:

• employment growth;
• household formation;
• transport;
• schools;
• shopping;
• health services;
• new infrastructure;
• local development.

A suburb can have population growth but still struggle with rental competition if new housing supply is arriving faster than tenant demand. The strongest investment locations will generally be those where housing demand and supply are moving in the investor’s favour. A new estate may look impressive today. But imagine five years later:

• 2,000 additional houses have been completed;
• several townhouse projects have been approved;
• an apartment project has entered the market;
• Hundreds of similar homes are competing for tenants.

The population may have grown. But the investor may still face greater rental competition. This is why new-build investors need to investigate future supply, not just current demand.

Read about: Self-Employed, Investors and Non-Traditional Borrowers: Are More Australians Turning to Alternative Home Loans?

Perth’s Long-Term Planning Makes Infill Increasingly Important

The WA Government’s Perth framework plans for approximately 800,000 additional homes, with at least 380,000 expected through increased density around transport hubs, activity centres and existing suburbs in the Central sub-region. This is a major structural trend. It suggests that future Perth investment opportunities may increasingly include:

• townhouses;
• villas;
• medium-density developments;
• apartments;
• compact-lot homes;
• infill redevelopment.

For investors, this creates new opportunities. It also means that the traditional assumption that a detached house on a large block is the only sensible Perth investment is becoming less defensible.

New properties can sometimes be difficult to price. Developers may set prices according to:

• construction cost;
• land cost;
• margin;
• marketing;
• incentives.

Established properties have a longer trail of comparable transactions. Investors can examine:

• recent settled sales;
• land size;
• house size;
• age;
• condition;
• renovation level;
• street position;
• rental history.

This makes negotiation easier. It is one reason established property remains relevant even after the tax changes.

The Three Risks Perth Investors Should Take Most Seriously

Risk 1: Overpaying for the tax advantage

• If thousands of investors begin looking for new builds, developers and sellers may gain pricing power.
• Investors need to protect themselves against paying an excessive premium.

Risk 2: Buying into future oversupply

• A new suburb can grow rapidly while simultaneously producing a huge amount of competing housing.
• Growth is not enough. Supply must be measured.

Risk 3: Underestimating cash-flow pressure

• High gross yield does not equal positive cash flow.
• Finance costs can consume a large portion of rental income. Investors need to calculate the property after all major expenses.

New Build vs Established: The Real Perth Investment Decision

Factor	New build	Established property
Future negative gearing	More favourable for eligible property	More restricted for new purchases
Initial maintenance	Generally lower	Potentially higher
Depreciation	Potentially stronger	Depends on property
Construction risk	Higher	Minimal
Completion risk	Yes	None
Future supply	Potentially high	Often lower in established areas
Land scarcity	Can be lower	Can be higher
Tenant appeal	Generally strong	Depends on condition
Price benchmarking	Can be difficult	Stronger comparable-sales evidence
Location	Often growth areas	Often established
Resale market	Depends on product	Potentially broader
Investor appeal	Increasing	Still significant

The answer is not to choose one category automatically. Compare the specific property against the specific investment objective.

A Better Way to Compare Perth Investment Properties

Instead of relying on a single metric, investors can use a weighted scorecard.

Factor	Weight
Rental demand	20%
Purchase value	20%
Cash flow	15%
Future supply	15%
Location and infrastructure	10%
Capital-growth fundamentals	10%
Resale appeal	5%
Tax/new-build position	5%
Total	100%

This is not a financial formula. It is a decision framework. For example, a property might have:

• excellent rental yield;
• weak future supply fundamentals;
• average location;
• high maintenance.

Another property might have:

• slightly lower yield;
• excellent transport;
• strong owner-occupier demand;
• limited future supply;
• better resale prospects.

The second property could be the stronger long-term investment.

A rising market with extremely low listings can be difficult for investors.

• There is pressure to buy quickly.
• There is less opportunity to negotiate.
• There is less time for due diligence.
• There are fewer alternatives.

Perth’s increase in listings changes that equation. With 7,335 properties advertised at the end of August, buyers have more choice than earlier in the year. This does not mean every seller will negotiate heavily. But it does mean investors can afford to walk away from poor deals. One segment is becoming more supply-sensitive:

• new and outer-growth housing.

Another segment can benefit from scarcity:

• established, well-located housing.

The investor opportunity may exist in both. But the reasoning is different.

Growth-corridor strategy: Bet on:

• population;
• infrastructure;
• new employment;
• rental demand;
• housing affordability.

Established-location strategy: Bet on:

• scarcity;
• established amenity;
• transport;
• owner-occupier demand;
• land value;
• limited replacement supply.

Investors need to know which thesis they are actually buying.

Despite the lending decline, the rental market remains an important foundation.

• Perth’s 2.2% vacancy rate remains below REIWA’s balanced range.
• The median house rent is approximately $750 per week.
• WA population growth remains the fastest nationally at 2.2%.

This combination suggests that the underlying demand for rental housing remains meaningful. The challenge is affordability. A tenant cannot pay an unlimited rent simply because vacancy is low. At some point:

• household incomes;
• rent;
• mortgage costs;
• construction costs;
• must reconnect.

Investors therefore need to watch rental affordability just as closely as rental growth. The strongest new-build opportunity is not necessarily the newest suburb. It is the location where a new property solves a genuine housing need. That could mean:

• a family-sized home in a growing family corridor;
• a townhouse close to transport;
• a smaller home in an affordable market;
• a dwelling close to employment;
• a modern apartment in an established activity centre.

This is why the future Perth market is likely to reward functional housing.

What Investors Should Watch Between Now and July 2027

The next year could be particularly important. Investors should monitor:

• Investor lending: If investor lending continues falling, demand may weaken in some segments.
• Perth listings: If listings continue rising, negotiating power could increase.
• Vacancy rates: If vacancy remains below 2.5%, rental conditions remain relatively tight.
• Rents: If rent growth slows significantly, yield assumptions need to be revised.
• New dwelling approvals: This provides clues about future supply.
• Construction costs: Higher costs can push new-build prices higher.
• Interest rates: This directly affects borrowing and cash flow.
• Tax implementation: The exact practical operation of the 2027 changes will remain important for investor strategy.

A Practical 2026 Perth Investor Checklist. Before buying, ask these ten questions:

• What is the true comparable-sales value?
• What rent can the property realistically achieve?
• What is the net cash flow after all major costs?
• Who is the likely tenant?
• How tight is the local rental market?
• How much new housing can be delivered nearby?
• Is the property eligible for the intended tax treatment?
• What happens if interest rates remain high?
• Who is likely to buy the property from me in ten years?
• Would I still buy it if the market stopped rising for three years?

That final question is particularly important. A good property investment should not require constant capital growth to survive.

The Perth market is moving into a more complex phase. The easiest investment story has already passed. Perth is no longer the ultra-affordable market it was before the recent boom. The median house price is now around $960,000. Investors therefore need to work harder to find value. At the same time, the market has developed several important strengths.

• Strong population growth: WA remains Australia’s fastest-growing state, at 2.2% annually to December 2025.
• Tight rental conditions: Perth’s vacancy rate remains at 2.2%.
• Significant future housing demand: Perth plans to add approximately 800,000 homes.
• Increasing buyer choice: Perth listings reached 7,335 at the end of August.
• Investor caution: Investor loan commitments fell 8.6% in the June quarter.
• Policy-driven new-build opportunity: Negative gearing will be limited to new builds from July 2027, while eligible new builds retain the existing tax treatment.

These factors do not point towards one simple outcome. They point towards greater differentiation between properties.

There are three broad possibilities.

A. Scenario One: Investors Gradually Return to New Housing

If the tax changes encourage more investors towards new builds, developers may see increased demand. The strongest beneficiaries could be:

• correctly priced new homes;
• townhouses;
• medium-density properties;
• new housing in high-demand rental locations.

But investors would need to watch new-build premiums closely.

B. Scenario Two: Investors Become More Selective Across Both Markets

This may be the most realistic outcome. Investors continue buying property but become increasingly selective. They favour:

• stronger yields;
• better locations;
• lower maintenance;
• stronger tenant demand;
• more resilient resale markets.

This would create a market in which good properties continue to transact while weaker properties take longer to sell.

C. Scenario Three: Higher Financing Costs Create a Larger Investor Pullback

If interest rates remain restrictive for longer, investors may reduce borrowing. That could place additional pressure on:

• highly leveraged buyers;
• lower-yield properties;
• investor-heavy apartment markets;
• properties dependent heavily on tax deductions.

This would make cash flow even more important.

The Federal Budget may push investors towards new housing. But investors should not follow the policy unthinkingly. A new property can be:

• overpriced;
• poorly located;
• oversupplied;
• difficult to resell;
• expensive to hold.

An established property can also be:

• expensive;
• high-maintenance;
• low-yielding;
• exposed to future tax restrictions.

Neither category is automatically superior. The best investment is the property where the numbers and fundamentals align.

Key 2026 Perth Market Figures at a Glance

Indicator	Latest available figure	Why investors should care
Perth median house price	$960,000	Entry prices are substantially higher
Perth median unit price	$690,000	Units offer a lower entry point
Perth median house rent	$750/week	Rental income remains strong
Perth median unit rent	$700/week	Unit rental demand remains relevant
Perth vacancy rate	2.2%	Rental market remains relatively tight
Perth properties for sale	7,335	Buyers have more choice
Annual listing growth	146.1%	Market is becoming more balanced
WA population growth	2.2%	Strong underlying housing demand
WA annual population increase	~65,500	More households entering the market
Investor loan commitments	-8.6% q/q	Investor borrowing has weakened
Investor loan value	-10.2% q/q	Larger decline in investor finance
RBA cash rate	4.35%	Financing remains restrictive
APRA high-DTI limit	20%	Limits highly leveraged lending
APRA serviceability buffer	3 percentage points	Borrowing capacity remains tested
Future Perth/Peel homes planned	~800,000	Major long-term supply pipeline
Planned jobs	~1.2 million	Employment growth supports housing demand

Final Verdict: Perth Investors Are Not Leaving — They Are Recalculating

Australian property investors pull back after the Budget. The data tells a more nuanced story. Investor loan commitments fell sharply in the June quarter, with new investor loans down 8.6% and the value down 10.2%. But Perth’s underlying housing demand remains supported by:

• strong population growth;
• tight rental conditions;
• high rents;
• substantial long-term housing requirements.

At the same time, the sales market has changed. Perth now has more than 7,300 active properties for sale, giving buyers significantly more choice than earlier in the year.

The Federal Government has also introduced a structural reason for investors to look more closely at new housing. From July 2027, eligible new builds will retain negative-gearing access, while newly acquired established residential property will face tighter rules on using losses against other income. That combination is creating a new Perth investment equation:

• Tax efficiency matters.
• Cash flow matters.
• Rental demand matters.
• Future supply matters.
• Purchase price matters.
• Location matters.
• Resale appeal matters.

No single factor is enough. For investors considering Perth in 2026 and 2027, the smartest approach may therefore be to stop asking:

• “Is Perth property still a good investment?”

and start asking:

• “Which Perth property can deliver sustainable rental demand, manageable cash flow, strong long-term demand and a defensible purchase price under the new tax environment?”

For a Perth-focused agency such as Bargoti Real Estate, local knowledge becomes especially important. 

In a market with more listings, higher prices, tighter finance and greater tax complexity, investors need more than a suburb name and a growth percentage. They need to understand the individual property, the surrounding supply, the likely tenant, the comparable sales and the long-term resale market. The Perth market is therefore not simply moving from boom to bust. It is moving from momentum to selection.

• The earlier market rewarded buyers who moved quickly.
• The next market may reward buyers who research better.

And as the Federal Budget shifts investor attention towards new homes, the biggest opportunity may not be in simply finding the newest property. It may be in finding the right property, in the right Perth location, at the right price, for the right tenant — and with enough underlying demand to remain valuable when the market changes again. Perth’s next property opportunity may not belong to the investor who buys first. It may belong to the investor who researches better.

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