Perth Joins Million-Dollar Club as House Prices Surge

A Rapid, Decades-Long Climb

Perth’s path to a seven-figure median has been decades in the making but has accelerated sharply in recent years. Domain data shows the city’s median house price rose from $143,394 in 1994 to $528,779 in 2019, before more than doubling in the years since, a pace of growth considerably faster than the slow, steady climb recorded over the preceding quarter-century.

The acceleration has been particularly pronounced in Perth’s outer and traditionally more affordable suburbs, with more than 50 suburbs recording house price growth of 100 per cent or more over just the past five years, led by Orelia, Parmelia, Coolungup, Armadale and Merriwa. That pattern reflects buyers increasingly priced out of established inner and middle-ring suburbs pushing further out in search of relative affordability, in turn driving up prices in areas that were once considered budget-friendly alternatives.

The Affordability Toll

The million-dollar milestone has come with a steep affordability cost, particularly for entry-level buyers. Since 2019, entry-level house prices in Perth have climbed 74.3 per cent, adding roughly $275,000 to the cost of buying a first home, a pace of growth that has significantly outrun wage growth over the same period. Perth households now devote 39.5 per cent of their income to servicing a median mortgage, up sharply from 22.3 per cent in 2019.

The affordability squeeze is showing up in falling homeownership rates among younger West Australians. Homeownership among 30 to 34-year-olds in WA has fallen from 67 per cent for those born between 1947 and 1951 to just 56 per cent today, and analysts expect that figure to slide further if current price growth trends continue unabated.

Narrowing the Gap With the Eastern States

Perth’s traditional price discount relative to Melbourne, once one of its defining characteristics as a more affordable major Australian city, has narrowed dramatically. Back in 2019, a typical Perth house was 41.5 per cent cheaper than the equivalent Melbourne property, a discount that has now shrunk to just 2.1 per cent, illustrating just how sharply Perth’s relative affordability advantage has eroded over a relatively short period.

What Is Driving the Surge

Population growth remains the dominant force behind Perth’s price acceleration, with Western Australia recording the fastest population growth of any state in the country in recent years, driven by strong interstate and overseas migration into a resilient, resources-backed economy. That population growth has combined with a constrained pace of new housing construction, driven by rising building costs and labour shortages in the construction sector, to create the kind of sustained supply-demand imbalance that tends to push prices sharply higher over an extended period.

What It Means Going Forward

For prospective buyers, particularly first-home buyers, Perth’s new million-dollar median represents a genuinely more challenging entry point into the property market than the city has offered in living memory. Housing advocates have renewed calls for expanded government support for first-home buyers and accelerated land release in growth corridors, arguing that without a meaningful supply response, Perth’s newfound status among Australia’s most expensive capital cities risks becoming permanent rather than a temporary product of the current growth cycle.

How Perth Compares Nationally

Perth now sits within a genuinely competitive tier of Australian capital cities on median house price, trailing only Sydney, Canberra and Melbourne, and running close behind Brisbane, a dramatic repositioning for a city that spent much of the 2010s regarded as one of the country’s more affordable major markets following the end of the mining construction boom. That repositioning has occurred over a remarkably compressed timeframe compared to the multi-decade price growth trajectories recorded in Sydney and Melbourne.

Economists caution that Perth’s current growth rate is unlikely to be sustained indefinitely at anywhere near its recent pace, noting that affordability constraints eventually act as a natural brake on price growth as fewer buyers are able to service the mortgages required at prevailing price levels, regardless of how strong underlying demand and population growth remain.

Policymakers have generally been reluctant to intervene directly in house prices, instead focusing on supply-side measures such as accelerated land release and planning reform intended to ease the underlying imbalance between population growth and new dwelling construction that economists broadly agree is the primary driver of Perth’s current price surge.