Perth’s housing market has reached a significant milestone, with the median house price breaking through the $1 million mark. According to new data from real estate listing company Domain, house prices in the city surged by nearly 10 percent in the last quarter of 2025, reaching an average price of $1,087,762.
The report highlights a growing financial burden on Perth households, which now allocate 39.5 percent of their income to a median mortgage, a stark increase from 22.3 percent in 2019. This surge in property prices is attributed to a shortage of homes, as explained by Domain’s chief of research and economics, Dr. Nicola Powell.
“Rapid price growth has pushed home ownership further out of reach for many buyers, forcing tougher trade-offs and longer saving times,” Dr. Powell stated.
Market Dynamics and Comparisons
Over the past five years, house prices in more than 50 Perth suburbs have doubled, with the southern suburb of Orelia experiencing the highest growth at 154 percent. Despite this rapid increase, Dr. Powell notes that Perth remains relatively affordable compared to other Australian capitals.
“Despite reaching the $1 million milestone, Perth continues to offer relative value compared to other capitals, supported by higher-than-average wages and shorter saving time-frames for first-home buyers,” she added.
Perth’s housing prices are closing in on those of larger cities like Melbourne. In 2019, the cost of a home in Perth was 41.5 percent less than in Melbourne. However, the latest data shows this gap has narrowed to just 2.1 percent.
Challenges for First-Time Buyers
The Domain report indicates that first-time home buyers are facing significant challenges as the price of an entry-level home has risen by 74.3 percent since 2019, adding approximately $275,000 to the purchase price. This trend is contributing to a decline in home ownership, which is expected to continue as property prices rise.
Dr. Powell suggests that flexibility is crucial for those entering the market, whether it means purchasing further from the CBD, opting for smaller homes, or considering units and townhouses.
“Flexibility will be key, whether that means buying further from the CBD, choosing smaller homes, or considering units and townhouses,” she advised.
Perth’s Appeal and Economic Strength
Domain president Jason Pellegrino attributes the rise in property prices to Perth’s attractiveness as a place to live, work, and invest. He cites the state’s economic strength and livability as factors drawing new residents at a record pace, making Western Australia the nation’s fastest-growing state.
“The city’s strong appeal as a place to live, work and invest, combined with the state’s economic strength and livability, has attracted new residents at record pace,” Pellegrino said.
Discrepancies in Data and Future Outlook
While Domain’s data paints a picture of rapid growth, it differs from figures provided by the Real Estate Institute of WA (REIWA), which reported Perth’s median house sale price at $840,000 in December, the highest it had ever recorded. According to REIWA, listings for sale across Perth fell to a record low of 1,881 at the end of December.
Property analyst and valuer Gavin Hegney notes that while there are still some reasonably priced properties, they are increasingly difficult to find. He explains that the boom does not occur uniformly across all suburbs.
“There’s fewer and fewer properties looking like they’re really good value for money, but they do exist because a boom doesn’t happen in unison right across all suburbs,” Hegney told ABC Radio Perth.
Meanwhile, WA Premier Roger Cook has announced that the government is working to increase housing supply to alleviate price pressures. As the city continues to grow, the challenge remains to balance demand with affordability, ensuring that Perth remains an accessible and attractive place for both current and future residents.
