When a conflict begins thousands of kilometres from Australia, it can be tempting to assume its economic consequences will stay overseas. For Perth homeowners, buyers and investors in 2026, that assumption is proving increasingly dangerous. The conflict involving Iran and the wider Middle East has created a chain reaction that reaches far beyond geopolitics. Oil prices respond to uncertainty. Petrol prices rise. Transport becomes more expensive. Businesses face higher operating costs. Household budgets become tighter. Inflation becomes harder to control. And when inflation refuses to settle comfortably within the Reserve Bank of Australia’s target range, the housing market becomes one of the first places to feel the consequences. The chain is surprisingly simple: 

Iran conflict → oil shock → higher fuel prices → higher transport and business costs → higher inflation → tighter monetary policy → higher interest rates → reduced borrowing capacity → weaker housing demand → longer selling times → greater buyer negotiation power → slower property price growth.

But this story has an important second half. Perth’s housing market entered 2026 with extraordinary momentum. Housing supply remained constrained, population growth continued to support demand, rents remained elevated, and prices had already risen dramatically. So the Iran conflict hasn’t simply turned a booming market into a falling market. Instead, Perth is experiencing something more nuanced. The market is transitioning from an exceptionally tight seller’s market towards a more balanced market. According to the latest REIWA data available in August 2026:

• Perth’s median house price reached $950,000, while the median unit price reached approximately $682,500 based on transactions for the 12 months ending July 2026.
• The median house price was still 18 per cent higher than a year earlier, while the median unit price was up 22.7 per cent.
• At the same time, however, Perth’s active property listings reached 6,718 at the end of July, more than double the level recorded a year earlier.
• Houses were taking a median of 23 days to sell, compared with 13 days a year earlier.

So what is happening? The answer lies in the interaction between inflation, household affordability, interest rates, confidence and housing supply. This is where the RBA’s warnings become particularly relevant. 

For Perth property owners, the question isn’t simply whether the Iran conflict will cause house prices to fall. The more useful questions are:

• How much has the conflict actually changed Perth housing demand?
• How are higher fuel prices affecting household borrowing capacity?
• Why did the RBA raise rates in 2026?
• Could another rate rise still happen?
• Which Perth suburbs are more exposed to affordability pressures?
• Why are some suburbs continuing to perform strongly?
• Could property prices fall even while Perth’s median remains high?
• What does the changing market mean for sellers?
• What does it mean for first-home buyers?
• Are investors becoming more cautious?
• Could rents remain high even if house-price growth slows?
• And perhaps most importantly: what should Perth property owners and buyers do next?

For Bargoti Real Estate, these questions are not theoretical. They are the questions Perth families are asking around the kitchen table. Before looking at the Iran conflict, it is important to understand where Perth’s housing market actually stands.

• The easiest mistake in property commentary is to look at one number and declare the market either “booming” or “crashing”.
• Neither description accurately captures Perth in August 2026. The latest REIWA figures show a market that remains substantially stronger than a year ago, but where momentum has clearly moderated. 

Perth housing market snapshot:

Indicator	Latest 2026 figure	What it tells us
Median Perth house price	$950,000	Prices remain at historically high levels
Median Perth unit price	~$682,500	Unit market continues to perform strongly
Annual house price growth	18.0%	Strong annual growth remains
Annual unit price growth	22.7%	Units have outperformed houses
Median house rent	$750/week	Rental affordability remains under pressure
Median unit rent	$700/week	Unit rents remain elevated
Active properties for sale	6,718	Buyer choice has increased dramatically
Annual change in listings	+101.9%	Market supply has normalised significantly
Median days to sell — houses	23 days	Sales are taking longer
Median days to sell — units	19 days	Buyers have more time
Rental listings	2,213	Rental supply remains relatively tight
Perth vacancy rate	2.2%	Still below a traditionally balanced market
RBA cash rate	4.35%	Borrowing conditions remain restrictive

There is an apparent contradiction here. Prices are still rising strongly, but the market is becoming softer. That is not unusual at a turning point. Property markets do not normally move directly from boom to crash. They tend to move through stages:

Extreme shortage → intense competition → rapid price growth → affordability pressure → demand moderation → increased listings → longer selling times → slower price growth → stabilisation.

Perth is currently somewhere between the final stages of the boom and the early stages of a more balanced market.  REIWA itself describes Perth as transitioning towards more balanced conditions. In July, the median house sale price rose 2.2 per cent over the month to $950,000 and remained 18 per cent higher year-on-year. However, REIWA also reported that buyers now have more choice, more time and greater negotiating power than they have had for several years. A slowing market is not automatically a falling market.

Whether you’re buying or selling, Trusted Real Estate Agents in Perth can help you achieve the best results.

The Iran Conflict: Why Does a War Overseas Matter to Perth Property?

The property market is ultimately connected to the broader economy. A Perth home may be physically located in Dayton, Caversham, Morley, Baldivis or Bayswater, but global financial markets influence its buyer’s mortgage.

• Global oil markets influence the fuel in the buyer’s car.
• The cost of transporting building materials is influenced by fuel.
• Energy influences the cost of running a construction company.
• Logistics influences the price of groceries.

All of these factors influence household disposable income. That means an overseas conflict can eventually reach the Perth property market without a single missile needing to come anywhere near Western Australia. The RBA has explicitly identified the Middle East conflict as an inflation risk. In August 2026, RBA Deputy Governor Andrew Hauser warned that further rate rises could be necessary if inflation risks crystallise, identifying the ongoing Middle East conflict as a key upside risk to inflation. The cash rate remained at 4.35 per cent following the August meeting. This is significant because interest rates are one of the strongest transmission mechanisms between inflation and property. The conflict does not directly determine the price of a Perth house. It influences the economic conditions under which people buy Perth houses.

1. The First Shock: Oil

The most immediate economic connection between the Iran conflict and Australian households is energy. The Middle East remains central to global energy markets. When geopolitical tensions threaten oil supply or transport routes, global oil prices can rise rapidly. Australia is not an isolated energy economy. Higher international oil prices feed through into domestic petrol prices. And petrol is not simply a transport expense. It is an input into almost everything.

• A truck delivering groceries uses fuel.
• A tradie travelling to a building site uses fuel.
• A courier delivering materials uses fuel.
• A property manager inspecting homes uses fuel.
• A family driving children to school uses fuel.
• A construction company transporting materials uses fuel.
• When fuel becomes more expensive, the impact spreads.

The RBA itself highlighted the scale of the energy shock in 2026. In a May speech on inflation and the Middle East conflict, the central bank noted that Australian petrol prices had risen sharply, with its forecasts showing headline inflation potentially reaching 4.8 per cent in the June quarter of 2026 before easing later. That is far from the RBA’s preferred inflation range of 2–3 per cent.

2. From Petrol Prices to Inflation

Imagine a Perth household with two cars.

• One parent works in the CBD.
• The other travels between different work sites.

The children attend school outside walking distance. The family is already paying a mortgage. Then petrol becomes significantly more expensive. The family has two choices. Either:

• spend more money on fuel, or
• reduce spending elsewhere.

That “elsewhere” might include:

• restaurants,
• holidays,
• entertainment,
• furniture,
• renovations,
• new cars,
• discretionary shopping,
• savings,
• or the amount available for a mortgage.

Multiply that household by hundreds of thousands of households. That is how a commodity shock can become an economic demand shock. But there is another layer. Businesses facing higher fuel and transport costs often have to raise prices. That means higher inflation.

The ABS reported that Australia’s annual CPI inflation reached 4.6 per cent in March 2026, its highest level since September 2023.

• Automotive fuel was a major driver, rising 24.2 per cent over the year and posting a particularly sharp monthly increase. Inflation subsequently eased.
• By June 2026, annual CPI inflation had moderated to 3.8 per cent, while trimmed mean inflation remained at 3.6 per cent. 
• Housing was one of the largest contributors to annual inflation, increasing 6.8 per cent. But 3.8 per cent is still above the RBA’s target range.

And that is the problem. The RBA cannot simply ignore inflation because households are already under pressure. Its mandate requires it to keep inflation under control. This creates a difficult trade-off.

• Higher fuel prices hurt households.
• Higher interest rates hurt households.

And in some cases, households experience both at the same time. This is one of the most important economic tensions of 2026.

• If the RBA leaves rates too low while inflation remains elevated, inflation may become entrenched.
• If the RBA raises rates aggressively, it can weaken household spending, employment and housing demand.

The RBA has already raised rates three times in 2026, adding 75 basis points in total and taking the cash rate to 4.35 per cent. It then held the rate at 4.35 per cent at its June and August meetings. The RBA therefore has to balance two risks.

• Risk one: Inflation remains too high: This can reduce real household purchasing power and damage economic stability.
• Risk two: Monetary policy becomes too restrictive: This can reduce spending, investment and housing demand too severely.

The message is therefore not: “Rates are definitely going higher.” Nor is it: “Rates are definitely coming down.” The message is closer to: “Inflation remains a risk, and further tightening remains possible if necessary.” For property buyers, that uncertainty matters almost as much as the rate itself.

Also Read: Buy and hold: The tightly-held suburbs where people stay for decades

Why Higher Interest Rates Hit Property So Quickly

Property is unusually sensitive to interest rates because most buyers borrow substantial amounts of money. Consider two hypothetical Perth buyers.

Buyer A

• Purchase price: $750,000
• Deposit: $150,000
• Mortgage: $600,000

Buyer B

• Purchase price: $1,000,000
• Deposit: $200,000
• Mortgage: $800,000

A relatively small change in mortgage rates can therefore translate into thousands of dollars in additional annual interest costs. But the effect is not limited to the mortgage. The household is also dealing with:

• higher petrol prices,
• higher insurance,
• higher groceries,
• higher utilities,
• higher childcare,
• higher rents for those yet to buy,
• higher maintenance costs,
• and higher general household expenses.

This changes the way people think about buying property. In a low-rate environment, buyers may ask: “How much can the bank lend me?” In a higher-cost environment, buyers increasingly ask: “How much can I comfortably repay?”

A common misunderstanding is that interest rates only affect people who already have mortgages. They also affect people who are trying to get mortgages. Suppose a household once qualified for a $900,000 mortgage. If higher interest rates and higher living expenses reduce its borrowing capacity to $750,000, the household has effectively lost $150,000 of purchasing power. The family may still earn the same salary. It may still want the same house. But its maximum affordable purchase price has changed. This is one reason housing demand can weaken without a large increase in unemployment.

REIWA’s 2026 data illustrates this well. At the end of 2025, Perth’s property market was extraordinarily tight.

• Active listings were below 2,000 at the end of December 2025.
• By the end of July 2026, active listings had reached 6,718.
• That represents a rise of more than 100 per cent over the year.

But this should not be interpreted as 6,718 desperate sellers suddenly entering the market. 

• New listings have returned towards longer-term averages.
• While sales activity has moderated and properties are taking longer to sell. 

That combination naturally increases the number of properties available at any one time. Still, the practical impact is the same. Buyers have more choices. And when buyers have more choice, sellers have less pricing power. That is the beginning of a more balanced market. Property headlines love median prices.

• “$950,000!”
• “$1 million!”
• “18 per cent growth!”

These figures are important. But they don’t tell the whole story. For an individual homeowner, the most important question is not: “What is Perth’s median price?” It is: “What are comparable properties in my suburb selling for, and how long are they taking to sell?” This is where suburb-level research becomes essential. A $950,000 Perth median does not mean every Perth house is worth $950,000. Perth is not one market. There are hundreds of micro-markets.

REIWA reported that Perth’s median weekly house rent was $750 in July 2026, while the median unit rent was $700. The vacancy rate was around 2.2 per cent in July. REIWA notes that a vacancy rate between approximately 2.5 and 3.5 per cent is typically considered balanced, meaning Perth remained relatively tight. A slowing sales market does not automatically mean a slowing rental market. In fact, higher interest rates can strengthen rental demand. The city’s suburban structure means transport costs matter. For many households, owning a home further from the CBD may save hundreds of thousands of dollars compared with inner-city property. But that affordability advantage can partly be offset by:

• fuel,
• commuting time,
• vehicle maintenance,
• insurance,
• toll-free but longer-distance travel,
• and dependence on multiple cars.

Therefore, when petrol prices rise, the effective cost of living in an outer suburb also rises. This does not necessarily cause outer-suburban property prices to fall. But it can influence what buyers are prepared to pay. A buyer might begin thinking: “If I am spending more on fuel every week, should I spend another $50,000 to live closer to work?”

Why Perth Property Prices May Slow Without Crashing

This is the key takeaway from the current data. Perth has several structural factors supporting housing demand.

• Western Australia continues to attract new residents.
• Construction has struggled with high costs, land constraints and delivery challenges.
• Vacancy remains relatively low.
• Perth’s economy continues to benefit from resources, infrastructure, construction and population growth.
• Even after its rapid growth, Perth remains comparatively affordable against some eastern capital markets.

These factors create a floor underneath demand. At the same time:

• interest rates are higher;
• living costs are higher;
• fuel prices have risen sharply;
• buyer sentiment has weakened;
• listings have increased;
• selling times have increased.

That creates a ceiling on price growth. The likely result is not necessarily: Boom → crash. It may instead be: Boom → slowdown → stabilisation → selective growth.

A. Suburb Example 1: Dayton — A Local Market Worth Watching

Dayton represents an interesting example of how affordability and lifestyle can intersect. A buyer priced out of a more expensive established suburb may look towards newer housing corridors. But even growth suburbs are not immune to interest-rate pressures. When borrowing capacity falls, buyers often adjust in one of four ways:

• reduce the size of the home;
• move further from the CBD;
• delay the purchase;
• increase the deposit before buying.

This means affordable growth suburbs can still attract demand even as the overall market slows. But the nature of demand changes. Instead of emotional bidding, buyers become more analytical. They ask:

• What is the land size?
• What are comparable sales?
• What is the rental return?
• How much will insurance cost?
• What are the strata or maintenance costs?
• How close is the property to schools and transport?
• Is the asking price justified?
• What will the property be worth if the market is flat for two years?

That is a healthier market.

B. Suburb Example 2: Caversham — Established Demand Meets Affordability

It offers proximity to the Swan Valley, established amenities and access towards the eastern and north-eastern parts of Perth. Bargoti Real Estate currently markets properties in Caversham, including a four-bedroom property at Bernborough Avenue. Caversham shows why Perth cannot be analysed through interest rates alone. A well-positioned property can continue attracting buyers even when the broader market slows. Housing demand is not purely financial.

• People need somewhere to live.
• Families want schools.
• Workers want manageable commutes.
• Buyers value established neighbourhoods.
• Investors look for rental demand.

So while higher rates reduce what people can pay, they don’t eliminate the underlying need for housing.

C. Suburb Example 3: Baldivis — The Importance of the Affordable End

Baldivis is another important case study. REIWA’s July weekly data showed Baldivis among Perth’s most active suburbs for both sales and rentals. This matters because affordability becomes increasingly important when borrowing conditions tighten. Suppose a buyer has a fixed borrowing limit. They may have previously considered:

• A $900,000 established property.
• A $1 million property.
• A larger family home.

After higher interest rates and living costs, the buyer may instead target:

• A 700,000–800,000 property.
• A smaller home.
• A townhouse.
• A property further from the CBD.

This creates what economists sometimes describe as downward filtering of demand. The buyer moves down the price ladder. This is one reason affordable suburbs can remain resilient even when higher-value suburbs experience softer demand.

D. Suburb Example 4: Harrisdale

Harrisdale was among the stronger-performing Perth suburbs in July, with its median house price rising 3.4 per cent over the month to $1.055 million, according to REIWA. This is a good reminder that the Iran conflict and higher interest rates don’t affect every suburb in the same way. A suburb can record price growth even while the broader market becomes more balanced. If a suburb has:

• limited quality stock,
• strong family demand,
• established amenities,
• good transport,
• attractive school options,
• and relatively low turnover,

then a reduction in overall borrowing capacity may not immediately translate into falling prices. Instead, it may simply slow the rate of growth.

E. Suburb Example 5: Willetton

Willetton also recorded strong monthly performance, with its median house price rising 3.0 per cent in July to $1.481 million. High-value suburbs can remain strong when property is scarce, and the buyer pool is relatively resilient. But this does not mean every property in the suburb will achieve the median. The home’s quality matters more.

• In a booming market, buyers may overlook flaws because they fear missing out.
• In a balanced market, buyers become selective.
• A renovated four-bedroom home near desirable amenities may continue to attract strong competition.
• An overpriced property requiring significant work may sit on the market.

That is why the transition from boom to balance can create greater divergence between properties within the same suburb.

F. Suburb Example 6: Belmont and Rivervale — The Unit Story

For years, Perth’s property conversation focused heavily on houses. But affordability pressures are changing the equation. REIWA reported that Perth’s median unit price reached about $681,000 in July, up 22.7%. Some unit markets have been particularly strong. In July:

• Claremont’s median unit price rose 11.5 per cent to $1.0925 million;
• Rivervale rose 1.9 per cent to $642,000.
• Belmont rose 1.7 per cent to $590,000;
• Cockburn Central rose 1.7 per cent to $600,000;
• Tuart Hill rose 1.6 per cent to $710,500.

This is important because higher mortgage costs can make units comparatively attractive. A buyer who cannot comfortably afford a $950,000 house may be able to consider a 600,000–700,000 units. That does not mean units are automatically better investments. It means the affordability equation can shift in their favour.

Explore: First Home Super Saver Scheme 2026 | Perth First Home Buyers

What Happens If the RBA Raises Rates Again?

This is one of the biggest questions hanging over the Perth property market. As of August 2026, the RBA cash rate is 4.35 per cent. The Bank has held rates steady at recent meetings, but officials have repeatedly stressed that inflation risks remain important. If inflation rises again because of energy prices, the RBA could face renewed pressure to tighten. A further increase would have several potential effects.

• Borrowing capacity would decline: New buyers could qualify for less.
• Mortgage repayments would rise: Existing variable-rate borrowers would have less disposable income.
• Consumer spending could weaken: More income would go towards debt servicing.
• Housing demand could soften further: Fewer buyers could compete aggressively.
• Selling times could increase: Properties might remain on the market longer.
• Negotiation could become more common: Buyers may submit lower offers.
• Price growth could slow further: Some suburbs could experience flat or declining prices.

But again, that does not guarantee a Perth-wide crash. If inflation gradually declines while the economy slows, the RBA may be able to keep rates steady rather than raise them further.

• Buyers could gradually adjust to the current mortgage environment.
• Banks could regain confidence in lending.
• Households could rebuild budgets.
• Property demand could stabilise.

This could create a sideways-to-moderate-growth market rather than a crash. Housing markets are driven not just by interest rates but by expectations. If people believe rates have peaked, some waiting buyers may return.

After the RBA held rates at 4.35 per cent in August, the Westpac-Melbourne Institute consumer sentiment index increased 6 per cent to 88.9. Mortgage holders’ sentiment increased particularly strongly. However, the index remained almost 10 per cent below its level a year earlier. It suggests households may be feeling slightly better. But they are not necessarily feeling comfortable. This distinction matters for property. A buyer may move from: “I am terrified rates will rise again.” to: “Maybe rates have peaked.” That small psychological shift can significantly affect property enquiries. During a highly competitive market, sellers can sometimes:

• list aggressively,
• wait for multiple offers,
• encourage competition,
• and let buyers bid against each other.

That strategy becomes less reliable when active listings increase. REIWA reported that Perth houses took a median 23 days to sell in July, compared with 13 days a year earlier. Twenty-three days is still not a distressed market. The property market is effectively telling sellers: “You still have demand, but you no longer have unlimited demand.”

Suppose a similar property sold for $900,000 six months ago. It is tempting to assume your property is worth $950,000 today. But what if:

• listings have doubled,
• buyer enquiries have fallen,
• mortgage rates have increased,
• selling times have lengthened,
• and several competing properties are now available?

The market may not support the same growth rate. This is why a local appraisal becomes more valuable in a changing market. At Bargoti Real Estate, we offer personalised property appraisals based on local market knowledge and current conditions. First-home buyers have arguably experienced the most frustrating side of the Perth housing cycle.

• Prices have risen.
• Rents have risen.
• Deposits have become harder to save.
• Interest rates have increased.
• Living costs have risen.
• And competition has historically been fierce.
• But the market’s transition could create an opportunity.
• More listings mean more choice.
• Longer selling times mean more opportunity to conduct due diligence.
• A slower market can reduce the pressure to make an emotional purchase.

The challenge remains affordability. A first-home buyer should not confuse: “I can technically borrow this amount” with: “I should borrow this amount.”

Suppose a buyer has a $100,000 deposit. In a rapidly rising market, waiting can feel dangerous because the property may rise faster than the buyer can save. In a slower market, that urgency can diminish. If prices stabilise, the buyer may have time to:

• save more,
• improve borrowing capacity,
• reduce debts,
• improve employment stability,
• or compare more properties.

This is one of the few positive consequences of a slower market. Higher rates can make negative cash flow more painful. An investor purchasing a property at a high price with a modest rental return needs strong confidence in long-term capital growth. That confidence is harder to maintain when price growth is slowing. Consequently, investors increasingly need to assess: 

yield + capital growth + vacancy + costs + location + tenant demand

Rather than simply: “Perth prices are rising.” Instead of asking: “Will this property go up?” ask: “If prices do not rise for three years, does this investment still make sense?” A property with:

• strong rental demand,
• limited competing supply,
• good transport,
• desirable amenities,
• quality tenants,
• manageable expenses,
• and reasonable purchase pricing

A property purchased purely because “prices always go up” is considerably more vulnerable.

Why the $1 Million Perth Median Headline Can Be Misleading

REIWA has suggested Perth’s median house price could reach $1 million by the end of 2026, despite a softening market. But it should not be interpreted as: “Every Perth house is becoming a million-dollar property.” REIWA reported that by June 2026:

• 167 Perth suburbs had median house prices of $1 million or more, representing around 41.4 per cent of Perth suburbs.
• Five years earlier, only 42 suburbs—about 10.4 per cent—were in that category. But it also highlights affordability risk.

This demonstrates just how dramatically Perth’s housing market has changed. If property prices continue rising faster than wages and borrowing capacity, demand will eventually encounter a ceiling. Interest rates accelerate that process. As of August 2026, Perth’s overall median house price was still rising year on year. Therefore, saying: “The Iran conflict has caused Perth house prices to crash” would not accurately reflect the available data. A more precise statement is:

The conflict has contributed to inflationary pressure and economic uncertainty at a time when higher interest rates were already weakening housing demand, helping push Perth towards a more balanced market and increasing the risk of slower or negative price growth in selected suburbs and property segments.

Price declines are more likely to appear first where:

• supply is abundant,
• properties are investor-heavy,
• affordability is stretched,
• new developments compete directly with established stock,
• properties are poorly presented,
• asking prices are unrealistic,
• or demand is particularly sensitive to borrowing costs. 
• The opposite characteristics may offer greater resilience. 

These include:

• tightly held suburbs,
• established school catchments,
• transport-oriented locations,
• limited land supply,
• high owner-occupier demand,
• strong lifestyle appeal,
• established amenities,
• and properties that offer genuine value.

This does not guarantee price growth. But it can reduce downside risk.

A strong house in a desirable location can outperform a weak property in the same city. Imagine two homes.

Property A

• renovated;
• good street;
• excellent presentation;
• close to amenities;
• scarce land;
• realistic price.

Property B

• poor presentation;
• deferred maintenance;
• awkward layout;
• limited parking;
• overpriced.

Even if both are located in the same suburb, they may experience completely different buyer demand.

• During a boom, both may sell quickly.
• During a slowdown, the difference becomes obvious.

This is why changing markets reward quality. The psychology of buyers is changing.

• During the boom: “If I don’t buy now, I’ll never afford anything.”
• In the current market: “I’ll compare three properties and negotiate.”
• During the boom: “What if someone else offers more?”
• Now: “What evidence supports this price?”
• During the boom: “The property has only been online for two days.”
• Now: “It has been listed for three weeks. Why?”

This shift in psychology is arguably more important than any single economic statistic.

What Does the Iran Conflict Mean for Perth in the Next 12 Months?

There are several possible scenarios.

Scenario 1: Conflict eases, and oil prices fall

This would be the most favourable outcome for inflation.

Lower fuel prices could reduce headline inflation.

The RBA would face less pressure to raise rates.

Mortgage confidence could improve.

Buyer demand could recover.

Perth property growth could stabilise.

Likely housing effect: Positive for demand.

Scenario 2: Conflict continues, but oil prices stabilise

This may be the most realistic middle scenario.

Inflation remains elevated but does not accelerate dramatically.

The RBA holds rates.

Buyers gradually adjust to current conditions.

Property prices grow slowly or move sideways.

Likely housing effect: Balanced market with moderate price growth.

Scenario 3: Conflict escalates, and oil prices surge again

This would create the greatest housing risk.

Fuel prices rise.

Inflation increases.

RBA rate-hike expectations return.

Mortgage repayments increase.

Consumer spending falls.

Borrowing capacity declines.

Housing demand weakens.

Likely housing effect: Greater risk of price declines in weaker segments.

The biggest risk to Perth property is not necessarily the Iran conflict itself. It is the possibility of a second-round inflation effect. If higher energy prices become embedded into:

• wages,
• transport,
• food,
• services,
• construction,
• rents,
• and business costs,
• Inflation can remain elevated for longer. 

That would force the RBA to keep monetary policy restrictive. That’s when housing becomes more vulnerable. The conflict therefore matters because of what it does to inflation expectations.

The Inflation Chain in One Table

Shock	Immediate impact	Housing impact
Iran/Middle East conflict	Energy-market uncertainty	Higher economic uncertainty
Oil prices rise	Petrol becomes more expensive	Household budgets tighten
Transport costs rise	Goods become more expensive	Disposable income falls
Business costs rise	Businesses raise prices	Inflation remains elevated
Inflation rises	RBA faces pressure	Rate rises become more likely
Interest rates rise	Mortgages become more expensive	Borrowing capacity falls
Borrowing capacity falls	Buyers reduce budgets	Demand weakens
Demand weakens	Properties take longer to sell	Negotiating power shifts to buyers
Prices stop rising as quickly	Growth moderates	Some markets may decline
Rental demand remains strong	More people delay buying	Rental pressure persists

This is the mechanism behind the RBA’s warning.

A genuine housing crash normally involves several things happening together:

• rapidly falling prices,
• distressed sales,
• severe credit contraction,
• sharply rising unemployment,
• oversupply,
• falling rents,
• declining population,
• and significant mortgage stress.

Perth’s current data does not show all of those conditions. Instead:

• prices remain high;
• annual price growth remains positive;
• rental demand remains strong;
• vacancy remains relatively low;
• population growth remains supportive;
• listings have increased;
• selling times have lengthened;
• and buyer demand has softened.

That is better described as normalisation.

Bargoti Real Estate describes its approach as combining technology, local expertise, client focus and a “human touch”, with services covering sales, leasing, property management and investment. That approach becomes particularly relevant during market transitions.

• When prices are rising rapidly, almost every property can appear easy to sell.
• When the market becomes more balanced, expertise matters more.

The questions become:

• Which buyers are actually active?
• Which properties are attracting enquiries?
• Which suburbs are outperforming?
• Which properties are sitting?
• What price adjustments are generating inspections?
• What are comparable properties selling for?
• Which homes are achieving multiple offers?
• What are investors looking for?
• What are tenants prepared to pay?

These are local questions. And local questions require local data.

What Sellers in Dayton, Caversham and Surrounding Areas Should Watch

For owners in Perth’s north-eastern corridor, the next phase of the market could be particularly interesting. Areas including:

• Dayton,
• Caversham,
• Bennett Springs,
• Ballajura,
• Morley,
• Brabham,
• Aveley,
• Ellenbrook,
• Beechboro,
• Malaga,
• and surrounding suburbs. 

Some properties appeal strongly to first-home buyers.

• Others appeal to families.
• Some are investor-oriented.
• Some are suited to downsizers.

The buyer profile influences price sensitivity. For example, a property around $650,000 may attract a completely different pool of buyers from a property around $1.2 million. As interest rates remain elevated, affordability-sensitive segments may experience greater negotiation.

A. What Sellers Should Do Differently in 2026?

• Get a current appraisal: Not last year’s valuation. Not your neighbour’s sale. A current appraisal based on comparable properties.
• Prepare the property properly: Presentation matters more when buyers have choices.
• Price strategically: Overpricing can cost valuable early-market momentum.
• Watch buyer feedback: If multiple buyers independently say the same thing, listen.
• Understand competing listings: Your competition is not last month’s sale. Your competition is the property currently available to your buyer.
• Be prepared to negotiate: Negotiation is returning to Perth.
• Focus on net proceeds: The highest headline offer is not always the best outcome.

B. What Buyers Should Do Differently in 2026?

• Don’t panic-buy: More listings mean you can take time.
• Don’t assume prices will automatically fall: A balanced market can still experience price growth.
• Get finance sorted early: Interest-rate uncertainty makes borrowing capacity important.
• Stress-test the mortgage: Consider what happens if rates remain elevated.
• Research the suburb: Perth is not one market.
• Compare comparable sales: Don’t rely solely on the asking price.
• Consider total ownership costs: Mortgage + rates + insurance + maintenance + transport.
• Think long-term: Property should not be purchased solely on a six-month forecast.

The Iran conflict may dominate economic headlines in 2026. But Perth’s property market is shaped by structural forces that will exist long after the conflict ends. These include:

• population growth,
• land availability,
• infrastructure,
• employment,
• transport,
• housing construction,
• rental supply,
• household formation,
• and lifestyle demand.

Global events can change the speed of the property cycle. They do not necessarily change the underlying destination. This is why long-term investors should distinguish between:

• Cyclical shocks
• Structural fundamentals

The Iran conflict is a cyclical shock. Perth’s population growth and housing supply constraints are structural factors.

A Perth Property Market Scorecard for 2026

Factor	Current direction	Impact on Perth property
Inflation	Elevated but easing	Negative
Fuel prices	Volatile/elevated	Negative
Interest rates	High at 4.35%	Negative
Borrowing capacity	Under pressure	Negative
Consumer confidence	Improving but weak	Mixed
Sales listings	Rising strongly	Negative for sellers / positive for buyers
Selling times	Increasing	Softer demand
House prices	Still rising annually	Positive
Unit prices	Strong annual growth	Positive
Rental prices	Elevated	Positive for landlords
Rental vacancy	Around 2.2%	Positive for rental demand
Population growth	Supportive	Positive
Housing supply	Still constrained	Positive
Investor demand	More cautious	Mixed
Buyer choice	Increasing	Positive for buyers
Seller competition	Increasing	Negative for sellers
Overall market	More balanced	Neutral to cautiously positive

Suppose Perth prices rise 18 per cent in one year and then rise 4 per cent the following year. The second year feels dramatically weaker. But prices have not fallen. Similarly, if one suburb rises 2 per cent while another falls 4 per cent, Perth’s overall median may still rise. This is why suburb-level analysis matters. In a selective market, buyers increasingly reward:

• location,
• presentation,
• land,
• functionality,
• transport,
• schools,
• rental demand,
• scarcity,
• and fair pricing.

They increasingly punish:

• overpricing,
• poor maintenance,
• awkward layouts,
• inferior locations,
• unrealistic expectations,
• and unnecessary premium pricing.

That creates an interesting opportunity for sellers. The market may be slower. But a good property can still perform extremely well.

The next phase could widen the gap between suburbs.

• Some suburbs may continue growing.
• Some may flatten.
• Some may decline modestly.
• Some may experience renewed growth if interest rates eventually fall.

This is normal in a mature market. For example: 

• Affordable family suburbs may benefit from buyer migration down the price ladder.
• Premium suburbs may experience greater affordability pressure but retain scarcity value.
• Apartment markets may benefit from affordability.
• Investor-heavy areas may be more sensitive to financing costs.
• Growth corridors may be influenced by new supply.
• Established suburbs may benefit from limited land.

This is why “Perth forecast” is becoming less useful than “suburb forecast”. If inflation returns sustainably towards the RBA’s target range and economic conditions weaken enough, the RBA could eventually reduce rates. That would potentially:

• improve borrowing capacity,
• reduce mortgage repayments,
• increase buyer confidence,
• encourage refinancing,
• increase investment activity,
• and strengthen housing demand.

But the timing matters. As of August 2026, the cash rate remains at 4.35 per cent, and RBA officials still see inflation risks that could justify further tightening if needed. Therefore, assuming imminent rate cuts would be premature.

What Happens If Inflation Stays Around 3.5–4 Per Cent?

This could create a difficult environment for property.

• Rates may remain high.
• Household budgets remain under pressure.
• Real wages may struggle to catch up.
• Housing demand remains constrained.
• But supply also remains limited.

That is the recipe for a market that moves sideways.

• Prices may rise slowly.
• Some suburbs may fall.
• Others may outperform.
• Tenants remain under pressure.
• Investors remain selective.

This may become Perth’s defining housing environment over the next phase of 2026–27. A buyer who has:

• finance pre-approval,
• a clear budget,
• a strong deposit,
• suburb knowledge,
• comparable sales data,
• patience,
• and a willingness to negotiate

could be in a much stronger position than the emotional buyer of the previous boom. The market is giving buyers something they didn’t have enough of before.

A homeowner may think: “My neighbour sold for $900,000 six months ago, so mine must be worth $950,000.” But the market has changed.

• Listings have increased.
• Interest rates have increased.
• Buyer demand has softened.
• Selling times have increased.

That means the same property may not command the same premium. The seller who recognises the new market early can often outperform the seller who waits for the market to return to its previous conditions. The Iran conflict has demonstrated something important about Australian property. Housing does not operate in isolation. A property market that appears local is connected to:

• global energy,
• inflation,
• interest rates,
• employment,
• migration,
• consumer confidence,
• construction costs,
• and international financial conditions.

The journey from Iran to a Perth mortgage may look complicated. But the pathway is straightforward:

Conflict

↓

Energy uncertainty

↓

Oil prices

↓

Petrol prices

↓

Transport and business costs

↓

Inflation

↓

RBA policy

↓

Interest rates

↓

Borrowing capacity

↓

Housing demand

↓

Negotiating power

↓

Property prices

That is the story behind the headline. The conflict has contributed to energy-price volatility and inflationary pressure. Those pressures have made the RBA’s job harder. The RBA has responded with a more restrictive monetary stance, including three rate rises in 2026 before holding the cash rate at 4.35 per cent.

• Higher rates have reduced borrowing capacity.
• Higher living costs have reduced household disposable income.
• Buyer confidence has weakened.
• Demand has moderated.
• Listings have increased.
• Selling times have increased.
• Negotiating power has shifted towards buyers.

But Perth prices have not collapsed. The median house price reached $950,000 in July 2026, up 18 per cent year-on-year, while the median unit price reached approximately $682,500, up more than 22 per cent year-on-year.

Final Outlook: What Should Perth Expect?

The most likely path is not a dramatic overnight collapse. It is a period of adjustment. Perth is moving from an environment where buyers competed aggressively for scarce properties towards one where buyers have more choice.

• Inflation remains above the RBA’s preferred range.
• Fuel prices remain an important risk.
• The Middle East conflict continues to create uncertainty.
• Interest rates remain high.
• The cost of living remains elevated.

But Perth still has powerful underlying housing fundamentals. The market therefore looks increasingly like a two-speed market. One side is supported by:

• population growth,
• limited supply,
• strong rental demand,
• employment,
• desirable locations,
• and scarcity.

The other is constrained by:

• affordability,
• interest rates,
• inflation,
• higher household expenses,
• increased listings,
• and weaker consumer confidence.

The result is likely to be more selective growth.

• Some properties will sell immediately. Others will sit.
• Some suburbs will outperform. Others will flatten.
• Some buyers will negotiate successfully. Others will continue to wait.
• Some investors will see opportunities. Others will decide the numbers no longer stack up.

That is what a normalising market looks like. 

Perth Property Market 2026:

Question	2026 Answer
Has the Iran conflict affected Australian housing?	Yes, mainly through energy prices, inflation, confidence and monetary policy
Has it caused a Perth property crash?	No — Perth prices remain substantially higher year-on-year
What is Perth’s median house price?	Approximately $950,000
What is Perth’s median unit price?	Approximately 682,500–683,000
Are prices still rising?	Yes, strongly on an annual basis
Is the market slowing?	Yes
Are listings increasing?	Significantly
Are homes taking longer to sell?	Yes
Are buyers gaining negotiating power?	Yes
Is inflation still a concern?	Yes
Is fuel contributing to inflation?	Yes
What is the RBA cash rate?	4.35% as of August 2026
Could rates rise again?	Yes, if inflation risks intensify
Are Perth rents still high?	Yes
Is Perth’s rental market balanced?	Not fully; vacancy was around 2.2% in July
Should buyers panic?	No
Should sellers price aggressively?	No — accurate market pricing is increasingly important
Is Perth likely to remain one single market?	No — suburb-level differences are becoming increasingly important

The Iran conflict has reminded Australia that global events can quickly become household economic events.

• Petrol prices at the service station can affect the family budget.
• The family budget influences borrowing capacity.
• Borrowing capacity influences property demand.
• Property demand influences prices.

And eventually, all of that feeds back into the housing market. Perth has entered this period with considerable momentum. That momentum has not disappeared. But it has changed.For Perth property owners and buyers, that may ultimately be a good thing. Because when the noise fades, the fundamentals become easier to see. And in property, fundamentals tend to matter more than headlines. The extraordinary growth phase is giving way to a more measured, more selective and more analytical market.

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