On 12 May 2026, the Australian Government delivered the 2026–27 Federal Budget, setting fiscal and economic priorities for the year and forward estimates. The budget introduces a new economic strategy focused on cost-of-living relief, tax reform, productivity, and fiscal balance, amid global uncertainty. Ongoing deficits are expected in 2026–27, with plans to achieve balance later through savings and reforms. Key economic indicators include:

Indicator	2025–26 Forecast	2026–27 Estimate	Notes
Real GDP Growth	~1.8–2.5% estimated	Moderate growth forecast	Economy steady but cautious
Inflation	~4.1% (prev.)	Expected to ease toward 3–3.5%	Price pressures easing
Unemployment	~4.1%	Slight variability expected	Labour market remains tight
Gross Government Debt	~$1.0 trillion	~$1.1 trillion projected	~35.8% of GDP peak by 2028–29

WAa’s economy has diverged from some national trends over recent years. Perth’s market performance has been resilient, buoyed by strong demand, the strength of the resource sector, migration inflows, and relatively strong employment conditions. Within this broader national picture, forecasts suggest the Australian economy will maintain modest growth, although global risks — such as commodity price volatility and geopolitical pressures — persist. Lower inflation may gradually ease cost-of-living pressures, supporting household purchasing power. Wage growth is part of the Budget’s framing on cost-of-living relief, though real income gains will depend on inflation trends. Shifting to the property market, here is a current Perth Housing Market Snapshot (2026)

Metric	Perth Metro	National Average (approx.)
Median House Price (2026)	~$890,000	~$800,000+ (CoreLogic national estimate)
Median Unit Price	~$635,000	~$600,000+*
Median Weekly Rent (3BR)	~$700–$780	~$650–$700*
Sales Volume — Weekly	619 properties	Not directly comparable

National figures are approximate based on CoreLogic trends.

Perth has outpaced several capital cities in recent price growth, driven by constrained supply and ongoing demand. Properties remain in short supply, maintaining upward pressure on prices. Rental markets are seeing strong demand, with limited vacancies, pushing yields upward. Although national growth forecasts are moderate, the WA market continues to show structural resilience, with relatively higher growth in property values and rental rates. This resilience is bolstered by:

• Strong interstate and international migration into WA.
• Continued demand for housing in Perth suburbs such as Baldivis, Como, Bayswater, and Maylands.
• Economic benefits from the resource sector and infrastructure spending.

Migration policy assumptions matter for housing demand. A slight moderation in migration can ease demand pressure, but WA’s population growth remains strong relative to some other states. Scientists and economists often correlate increases in migration with stronger housing market demand — an important factor in Perth property markets. This focus aligns with national concerns about:

• Rising everyday costs (utilities, food, fuel).
• Average household disposable income growth is lagging inflation.
• Homeownership affordability challenges.

 The government’s fiscal strategy prioritises reform—not just short-term stimulus—reflecting a long-term view of productivity, investment, and labour market participation. The Budget emphasises easing cost-of-living pressures for households, particularly through tax relief and targeted measures.

Federal Budget 2026–27 — Tax Changes & Household Impacts Explained

Tax changes in the 2026–27 Federal Budget represent some of the most significant reforms in recent decades. They are aimed at improving fairness in the system, supporting workers, and encouraging productive investment — while addressing structural imbalances in the housing market. Key Tax Reform Measures:

Tax Measure	Implementation Date	Primary Effect
Working Australians Tax Offset (WATO)	From 2027–28	Annual tax cut of up to $250 for ~13M workers
Second Tax Rate Reduction	From 1 Jul 2026	16% marginal rate → 15%
Further Rate Cut	From 1 Jul 2027	15% marginal rate → 14%
$1,000 Instant Tax Deduction (no receipts)	From 2026–27	Simplified deduction for eligible workers
Capital Gains Tax (CGT) Reform	From 1 Jul 2027	Replace 50% discount with inflation-based discount + 30% minimum
Negative Gearing Limitations	From 1 Jul 2027	Limited to new builds to encourage supply
Minimum Tax on Discretionary Trusts	From 1 Jul 2028	30% floor tax
Permanent Instant Asset Write-Off ($20k)	From 1 Jul 2026	Support for small business investment

Building on these reforms, the Budget introduces a permanent tax offset of up to $250 per year for over 13 million workers, starting in the 2027–28 income year. Combined with existing tax reductions and the $1,000 instant deduction, the average worker could see up to ~AUD $2,816 in annual tax relief by 2028.

For many Perth households, this translates into improved disposable income — increasing capacity to save for housing deposits or manage household expenses.

Income Threshold	2025–26	2026–27	2027–28
Up to $18,200	0%	0%	0%
$18,201–$45,000	16%	15%	14%
$45,001–$135,000	30%	30%	30%
Higher brackets	unchanged	unchanged	unchanged

The reduction in marginal rates for lower- and middle-income households will directly benefit wage earners and working families. Particularly in Perth and WA, where living costs (housing, transport) are high, even modest rate reductions enhance real income.

On the investment front, investors holding older properties may need to reconsider their strategies as the reforms could reduce profitability, leading to less speculative activity. This shift may create opportunities for First Home Buyers by easing investor competition for established properties. In Perth, this reform could help contain price pressures partly driven by investors, though strong population growth and land scarcity in WA will continue to influence the market. A significant change in this budget is the adjustment to investment property taxation. The 50% capital gains tax discount is replaced by an inflation-indexed discount and a 30% minimum tax from 1 July 2027, ensuring that investors pay tax on real gains. Negative gearing will be limited primarily to new residential developments, with the objective of stimulating supply and reducing speculative activity in established housing markets. Small businesses and startups receive support through:

• A permanent $20,000 instant asset write-off, improving cash flow and investment confidence.
• Loss carry back & loss refundability provisions to support resilience and growth.

Taken together, these measures are particularly relevant for Perth’s small business community, including property services (e.g., builders, trades, agents), which benefit from improved liquidity and investment incentives.

Overall Household Impact — Summary Table

Category	Expected Net Effect for Households
Tax Cuts	Increased disposable income
WATO	Direct annual relief for workers
CGT Reform	Long-term investor behaviour change
Negative Gearing	May level the housing playing field
Business Tax Support	Benefits small business workers & owners

Perth’s relatively higher median prices mean that tax relief may not fully offset housing cost pressures. However, when paired with structural reforms to dampen speculative demand, middle-income earners may gradually experience improved affordability.

The following section compares the tax impact on Perth and national households.

Element	Perth	National
Median House Price	~AUD $890,000	~AUD $800,000+*
Median Weekly Rent	~$700–$780	~$650–$700*
Tax Relief Impact	Moderate	Moderate
Investment Property Demand	Strong	Variable

The Federal Budget 2026–27 presents a blend of economic prudence and structural reform. While the fiscal outlook remains cautious, tax relief measures, productivity incentives, and targeted reforms are designed to support households, encourage productive investment and gently ease cost pressures. For Perth and WA, these changes intersect with a robust local property market that has outpaced many national averages. However, reforms such as CGT and negative gearing limitations are likely to influence investor behaviour, with potential long-term benefits for housing affordability.

Federal Budget Priorities: Jobs, Skills & Future Workforce Funding

One of the central pillars of the 2026–27 Federal Budget is labour productivity and workforce capability. The Government’s position is clear: Australia’s economic resilience depends on a skilled, employed, and adaptable workforce. This is particularly relevant to WA, where labour shortages in construction, healthcare, mining support, logistics, and trades have directly influenced housing supply constraints and property market pressures. According to the Australian Bureau of Statistics (ABS), labour force data entering 2026:

Indicator	National	Western Australia
Unemployment Rate	~4.1%	~3.6%
Participation Rate	~66.8%	~68%
Skills Shortage Occupations	332+ roles	Construction, trades, nursing, aged care
Net Overseas Migration	Moderating but strong	WA above national growth rate

WA is closer to full employment than most states. This raises wages but also limits capacity—especially in building and infrastructure delivery.

The Federal Budget allocates billions over the forward estimates into:

• TAFE and vocational education expansion
• Apprenticeship incentives
• Fee-free TAFE places in priority occupations
• Migration program alignment with skills gaps
• Women’s workforce participation programs
• Digital, clean energy, and construction skill pipelines

Priority Sectors Identified

Sector	Why It Matters	WA / Perth Relevance
Construction & Trades	Housing supply	Direct impact on build times
Healthcare & Aged Care	Ageing population	Major employment growth
Clean Energy	National transition	WA resources & renewables
Digital & Tech	Productivity	Business and services growth
Early Childhood Education	Workforce participation	Supports dual-income families

Many believe jobs policy and property markets are unrelated. In reality, Perth’s housing supply is more limited by labour shortages than land. Suburbs like Baldivis, Byford, Ellenbrook, and Alkimos face longer build times due to shortages of:

• Bricklayers
• Electricians
• Plumbers
• Site supervisors

This Budget’s heavy investment in trades training and apprenticeships directly targets WA’s construction labour bottleneck. The key takeaway: Increasing skilled labour will help ease build delays and property market constraints over the next 3–5 years. Trend Table — Workforce & Housing Link.

Year	WA Unemployment	New Dwelling Approvals (WA)	Median Perth House Price
2023	3.8%	Low	$650,000
2024	3.7%	Moderate	$720,000
2025	3.6%	Constrained by labour	$820,000
2026	3.6%	Expected lift with training pipeline	~$890,000

As skills funding increases labour availability, housing construction capacity improves, easing long-term price pressure. The Budget also aligns skilled migration with shortages, meaning faster visa pathways for essential roles. These migrants rent first, then buy, feeding Perth’s rental demand before transitioning into homeownership. This explains why suburbs like Maylands, Bayswater, Belmont, and Rivervale show strong rental growth before sales growth. For buyers, investors, and developers:

• Expect gradual improvement in construction timelines from 2027 onward.
• Rental demand remains strong in worker-dense corridors.
• Outer-growth corridors benefit from future labour supply easing build delays.
• Medium-term stabilisation of price growth as supply improves.

Healthcare, Medicare & Aged Care — Federal Budget Explained

Moving beyond the workforce, healthcare is the second largest spending area in the 2026–27 Budget. The Government has framed health investment not just as welfare spending, but as economic infrastructure. Funding increases are directed to:

• Medicare bulk billing incentives.
• Public hospitals’ funding agreements.
• Aged care workforce wages.
• New aged care facilities.
• Mental health services.
• Regional and outer-metro healthcare access.

Healthcare employment is Stable, Growing, high-participation, and Suburb-anchored (hospitals, clinics, aged care homes). Key takeaway: Healthcare funding not only creates jobs but also boosts property demand in suburbs near medical facilities.

Hospital Zone	Key Suburbs	Property Impact
Fiona Stanley Hospital	Murdoch, Kardinya, Leeming	Strong rentals & owner-occupiers
Royal Perth Hospital	East Perth, Victoria Park	Units & apartments demand
Sir Charles Gairdner Hospital	Nedlands, Shenton Park	Premium housing demand
Joondalup Health Campus	Joondalup, Currambine	Family home demand

Healthcare workers prefer living within 15–20 minutes of their workplaces. The Budget’s higher aged care funding and staffing ratios have a property effect:

• More aged care facilities are being built.
• More aged care workers are employed.
• Workers rent/buy nearby.
• Families relocate elderly parents closer to facilities.

Suburbs seeing aged care expansion include: Como, Manning, Wilson, Gosnells and Armadale. Trend Table — Healthcare Employment vs Housing

Year	Healthcare Jobs WA	Perth Median Rent	Demand in Hospital Suburbs
2023	Rising	$520	Moderate
2024	Higher	$600	Strong
2025	Very high	$680	Very strong
2026	Peak growth	$750+	Extremely tight vacancy

Strengthening bulk billing reduces household out-of-pocket costs. This indirectly improves:

• Household savings.
• Borrowing capacity.
• Financial confidence for home buyers.

Especially relevant for young families in suburbs like Canning Vale, Thornlie, Harrisdale, and Piara Waters, where higher wages for aged care workers translate into greater borrowing capacity and increased demand in affordable suburbs.

• Greater borrowing capacity.
• More first-home buyers from this sector.
• Increased demand in affordable Perth suburbs.

The 2026–27 Budget reveals a clear pattern: Jobs policy and healthcare funding are reliable predictors of property demand corridors. For buyers and investors, focusing on hospital zones, growth corridors, trade-heavy outer suburbs, and affordable family areas can lead to strategic, informed decisions, especially with guidance from agencies like Bargoti Real Estate.

Education & Student Support in the 2026–27 Federal Budget

Education spending in the 2026–27 Budget is positioned as long-term economic infrastructure. Beyond schools and universities, these allocations directly influence migration patterns, rental demand, and first-home buyer behaviour — especially in Perth. The Government increases funding across key areas, including public schools and infrastructure upgrades.

• University research and domestic student places.
• International education recovery.
• HECS-HELP indexation relief.
• Student rent assistance expansion.

According to the Australian Bureau of Statistics (ABS) and education portfolio data:

Indicator	National	Western Australia
University Students	~1.6 million	~150,000+
International Students (returning growth)	Strong rebound	Perth major beneficiary
HECS Debt Holders	~3 million Australians	Significant youth cohort
Student Rent Assistance	Expanded eligibility	Direct rental market effect

The Budget caps and reforms HECS indexation to prevent debt from rising faster than wages. Young professionals in Perth suburbs such as Victoria Park, Bentley, East Perth and Mount Lawley. They are typically HECS holders. Lower indexation means:

• Improved borrowing capacity.
• Better savings potential for deposits.
• An earlier transition from renting to buying.

Strong recovery in international enrolments supported by federal policy. These students rent immediately, concentrating demand in the surrounding suburbs. Student Rental Hotspots:

University	Key Rental Suburbs	Property Type in Demand
UWA	Crawley, Nedlands, Shenton Park	Units, shared housing
Curtin	Bentley, Karawara, Victoria Park	Apartments, villas
Murdoch	Murdoch, Kardinya, Winthrop	Houses, townhouses

Federal funding for public schools and early learning improves the attractiveness of family suburbs. Suburbs benefiting from school upgrades: Harrisdale, Piara Waters, Baldivis and Ellenbrook. Students vs Perth Rents

Year	International Students WA	Median Perth Rent	Vacancy Rate
2023	Recovering	$520	1.2%
2024	Strong growth	$600	0.9%
2025	Very strong	$680	0.7%
2026	Peak return	$750+	<0.6%

Understanding education funding helps predict:

• Rental hotspots near universities.
• First-home buyer zones driven by school quality.
• Long-term owner-occupier suburb growth.

These are already high first-home buyer zones. Better schools = stronger owner-occupier demand. Education funding indirectly sustains Perth’s tight rental market.

Housing Affordability & Property Measures in the Federal Budget

This is the section most directly connected to real estate. The Federal Budget acknowledges that housing affordability is Australia’s largest social and economic challenge. The following are key housing measures addressing this issue:

Measure	Objective	Market Impact
Negative gearing limited to new builds (from 2027)	Boost supply	Reduces investor demand on established homes
CGT reform	Reduce speculation	Encourages long-term holding
Housing Australia Future Fund expansion	Social & affordable housing	Increases stock
Build-to-rent incentives	Institutional rental supply	Eases rental crisis
First-home buyer support programs	Ownership access	Demand in affordable suburbs

From 1 July 2027, investors can primarily negatively gear new builds. Effect in Perth:

• Investors shift focus to house-and-land packages in growth corridors.
• Reduced competition for established homes in the middle suburbs.
• Price moderation for older housing stock.

Growth corridors likely to benefit from increased investor interest include Alkimos, Eglinton, Byford, Baldivis, and Dayton. Meanwhile, Perth continues to face significant price and supply pressure.

Year	Listings Available	Median House Price	Investor Activity
2023	Low	$650,000	Moderate
2024	Very low	$720,000	High
2025	Extremely low	$820,000	Very high
2026	Constrained	~$890,000	Expected shift to new builds

Federal incentives for build-to-rent projects increase apartment supply near CBD, Transport corridors, universities, and Hospital zones. This benefits suburbs like:

• East Perth
• West Perth
• Subiaco
• Burswood

With investors shifting away from established dwellings. First-home buyers gain an advantage in suburbs such as Gosnells, Armadale, Midland and Thornlie. For Perth:

• New estates become investor magnets.
• Established suburbs become first-home buyer-friendly.
• Apartment supply rises in inner Perth.
• Rental demand remains extremely strong near job and education hubs.

National vs Perth Housing Comparison

Indicator	National	Perth
Median House Price	~$800,000	~$890,000
Rental Growth	High	Very high
Vacancy Rate	~1%	<0.6%
Supply Constraint	Significant	Severe

This Budget signals a structural reset in how property investment works in Australia.

Federal Budget Breakdown: Small Business, Startups & Growth Sectors

Small businesses are often described as the engine room of the economy. In WA, their impact is evident in construction, trades, logistics, hospitality, property, and professional services. The 2026–27 Budget aims to improve cash flow.

• Encourage capital investment.
• Support startups and innovation.
• Strengthen local employment ecosystems

Measure	From	Purpose	Property Market Link
Permanent $20,000 Instant Asset Write-Off	1 Jul 2026	Encourage equipment & vehicle investment	Trades capacity improves build speed
Loss carry-back provisions	Ongoing	Improve resilience	Business survival in growth corridors
Energy efficiency grants	2026	Lower operating costs	Commercial property upgrades
Digital & tech adoption funding	2026–27	Productivity	Growth in professional jobs
Startup & innovation incentives	Expanded	New enterprises	Rental & office demand

In Perth, small businesses employ a large portion of the workforce in suburbs where people also live. When small businesses thrive:

• Employment rises.
• Wages rise.
• Borrowing capacity rises.
• Rental demand rises.
• Owner-occupier demand follows.

Suburbs with high levels of small-business activity often exhibit strong property resilience.

Business Hub	Nearby Residential Suburbs	Property Effect
Osborne Park (industrial/commercial)	Tuart Hill, Yokine, Balcatta	Steady rental demand
Welshpool / Kewdale	Belmont, Cloverdale, Carlisle	Worker housing demand
Malaga	Ballajura, Mirrabooka	Affordable family homes
Canning Vale industrial zone	Canning Vale, Willetton, Thornlie	Strong owner-occupier market

Trend Table — Business Activity & Property

Year	WA Small Businesses	Perth Median House Price	Rental Demand
2023	Rising	$650,000	Moderate
2024	Higher	$720,000	Strong
2025	Very high	$820,000	Very strong
2026	Supported by Budget measures	~$890,000	Extremely strong

Funding for tech, clean energy, and innovation leads to growth in:

• Engineering firms.
• Environmental services.
• IT services.
• Consulting and design.

These workers prefer inner and middle suburbs such as Subiaco, Leederville, Mount Lawley, and West Perth, sustaining apartment and townhouse demand. Energy efficiency grants help small businesses upgrade their premises, boosting the viability of mixed-use precincts.

Conclusion — What the Federal Budget 2026–27 Means for Perth Property

Across all seven sections, the Federal Budget is a coordinated strategy shaping where Australians live, rent, buy, and invest. In Perth and WA , effects amplify with:

• Tight rental markets.
• Labour shortages are easing through skills funding.
• Education and healthcare employment nodes.
• Structural tax reform is shifting investor behaviour.

Budget Area	Direct Outcome	Perth Property Result
Tax Cuts & WATO	Higher disposable income	Improved borrowing capacity
CGT & Negative Gearing Reform	Investor shift to new builds	First-home buyer advantage in established suburbs
Skills & Migration	More workers	Rental demand then home buying
Healthcare Funding	Job clusters	Hospital suburb growth
Education Funding	Student inflow	Apartment & rental demand
Small Business Support	Employment growth	Suburb resilience
Build-to-Rent Incentives	More rentals	Inner-city apartment supply

Perth Suburb Categories to Watch (2026–2028)

Category	Suburbs	Why They Benefit
Hospital Zones	Murdoch, Nedlands, Joondalup	Healthcare funding
University Zones	Bentley, Crawley, Murdoch	Student return
Growth Corridors	Alkimos, Byford, Baldivis	Investor shift to new builds
Affordable FHB Zones	Gosnells, Midland, Armadale	Reduced investor competition
Business Hubs	Belmont, Tuart Hill, Canning Vale	Small business employment
Inner-City Apartments	East Perth, Subiaco	Build-to-rent, professionals

The Budget signals:

• Investors should consider new builds in growth estates.
• First-home buyers gain opportunities in established suburbs.
• Rental investors benefit near jobs, hospitals, and universities.
• Developers gain from the skills pipeline and tax settings.
• Sellers in middle suburbs may see sustained demand from owner-occupiers.

For Bargoti Real Estate clients, the Federal Budget provides a map for demand over the next 3–5 years. Align property decisions with:

• Education hubs.
• Healthcare zones.
• Growth estates.
• Business districts.

Buyers and investors can make evidence-based, forward decisions. The 2026–27 Budget avoids blunt property measures. It encourages supply, redirects investment, strengthens households, supports job creation, and improves affordability. This creates predictable property growth patterns for Perth rather than volatility. For informed agencies such as Bargoti Real Estate, it is an opportunity to guide clients with clarity, data, and confidence.

DISCLAIMER – The information and opinion provided is for guidance and general informational purposes only. The sole intention is to provide general understanding of the subject matter so the readers can assess whether they need more detailed information. The information provided on this website should not be regarded as a financial, business, legal or real estate advice and it is strongly recommended that the readers should seek their own independent financial, business, legal or real estate advice. While every effort has been made to ensure that the information and the material is correct and up to date at the date of publication. However, we do not guarantee or warrant the accuracy or completeness of the information provided as the factors like changes in circumstances after the time of publication, may impact such accuracy or completeness. Bargoti real estate will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.