Potential home buyers in Perth need to earn $16,500 more than they did in January to get onto the property ladder, according to property data firm Cotality. The minimum household income required to purchase the average house in the city has skyrocketed since the start of the year, driven by three interest rate rises by the Reserve Bank of Australia (RBA) since early 2026.
Interest rate hikes reduce borrowing capacity
The RBA's rate increases have brought the cash rate back to 4.35 per cent, reversing all cuts made last year. This has significantly reduced borrowing capacity for millions of Australians, particularly first-time buyers. Gerard Burg, head of research at Cotality, noted that rate hikes have compounded the challenges of servicing a mortgage across the country.
“In expanding markets like Perth, the compounding effect of rising property values and higher interest rates creates an aggressive income barrier for buyers, even at the lower end of the spectrum,” Burg said.
Property prices surge 25.8 per cent
The income increase comes as Perth property prices have shot up by 25.8 per cent over the past year, creating a perfect storm for aspiring homeowners. Many suburbs now belong to the exclusive $1 million club, with 197 out of 400 suburbs in Perth and Peel recording a median sale price of $1 million or more for houses. Units hit the median milestone in eight suburbs.
Surprising additions to the million-dollar house club include areas regarded as classic suburbia, developed between the 1950s and 1990s. These suburbs have median house prices between $1 million and $1.15 million and include Wanneroo, Heathridge, Craigie, Morley, Yangebup, Coolbellup, Kewdale, Parkwood, South Lake, Alexander Heights, Kiara, Ballajura, Redcliffe, Ferndale, Marangaroo, Eden Hill, Beldon, Belmont, Balcatta, Spearwood, Joondalup and Wilson.
