First-time home buyers in Perth are staring down the barrel of a million-dollar nightmare, with leading property figures issuing a grim forecast for the city's housing market. Experts are now predicting that the median house price in Perth could reach the $1 million mark by 2026, placing immense pressure on those trying to enter the market.
A Market Defying Expectations
The prediction comes from prominent industry leaders, including Property Club president Kevin Young. Young points to a severe and ongoing shortage of housing stock as the primary driver behind the relentless price growth. This shortage is not being met by new construction, creating a perfect storm for escalating values.
Recent data underscores the alarming trend. In the last financial year alone, Perth's median house price skyrocketed by 22.1 per cent. This surge has pushed the current median to a staggering $736,000, a figure that was almost unthinkable for many just a few years ago. The momentum shows no signs of slowing, with prices climbing another 2.2 per cent in the most recent quarter.
The Driving Forces Behind the Crisis
Several key factors are converging to create this affordability crisis. The chronic undersupply of homes is at the core, exacerbated by high construction costs and labour shortages that hinder new building projects. Simultaneously, demand continues to soar, fueled by robust interstate migration and strong local economic conditions.
Kevin Young's analysis is stark. He suggests that if the current annual growth rate of approximately 20 per cent were to continue, the math becomes frighteningly simple for aspiring homeowners. A continuation of this trend would indeed see median prices breach the $1 million threshold within the next few years, fundamentally altering the landscape of home ownership in Western Australia's capital.
Implications for Buyers and the Future
The consequences of this prediction are profound, particularly for first home buyers who are already struggling to save a deposit amidst rising rents and cost-of-living pressures. The dream of owning a standalone house in Perth is rapidly moving out of reach for average income earners, potentially forcing a generation towards higher-density living or prolonged periods in the rental market.
This forecast for 2026 serves as a urgent warning to all levels of government and the property industry. It highlights the critical need for policy interventions and accelerated housing supply solutions to prevent the market from becoming completely inaccessible. For now, Perth's property market continues its aggressive climb, leaving many to wonder if the $1 million median is an inevitability rather than a mere possibility.
