Nightmare for first-home buyers as Perth’s median house price tips over $1m, experts blame ‘perfect storm’

Perth homes have officially joined the million dollar club as median house prices hit a new high in the last quarter, pushing home ownership further out of reach for many buyers. Domain’s December quarter house price report found Perth’s median house price recorded an almost 10 per cent quarterly rise to $1,087,762. Real estate experts said low listings, lack of land supply and low build completions, and the Federal Government’s First Homebuyers Scheme were to blame for the price tag on homes continuing to reach new highs. Median house prices in Perth were just over $528,000 in December, 2019, but by the same month in 2024 that figure had almost doubled to $919,000. Twelve months on, it had grown by more than $168,000. It is the biggest jump in recent years and more than the previous 12 months, where the median house prices went from $764,480 to $918,902 — an increase of nearly $155,000. And it is not just houses on the rise. Units in Perth have also jumped in price by almost $100,000 in the last year, from $516,425 in December, 2024 to $608,520 in December, 2025. Domain chief of research and economics Nicola Powell said affordability pressures are shaping buyer behaviour. “Rapid price growth has pushed home ownership further out of reach for many buyers, forcing tougher trade-offs and longer saving times,” she said. “While price growth is expected to moderate, affordability challenges will persist unless housing supply improves.” Since 2019, entry-level house prices have risen almost 75 per cent, adding around $275,000 to the cost of buying and far outpacing wage growth. Perth households now spend almost 40 per cent of their income on a median mortgage, up from 22 per cent in 2019. More than 50 Perth suburbs have seen house prices double in the past five years including Orelia, Parmelia, Cooloongup, Armadale, and Merriwa. Dr Powell said despite reaching the $1 million milestone, Perth offered relative value compared to other capitals, supported by higher-than-average wages and shorter saving timeframes for first-home buyers. “Flexibility will be key, whether that means buying further from the CBD, choosing smaller homes, or considering units and townhouses,” she said. This was the case for Tyrone Griffin, who had to move further away from his desired suburbs and spend $100,000 more to get in the housing market. The 34-year-old settled in Heathridge in November, spending more than $950,000 for the property. “Everytime I kept going to home opens there was always 50 plus people there and the offers just kept going above and beyond what was originally the offer,” he said. “I started looking in Padbury and Craigie and most properties were still over $1 million already so I just had to pivot and go to an area that was more affordable. “I found where we are now, which was still definitely a lot more than I was expecting to pay. “We ended up possibly overpaying for this house just to get in the market and have somewhere to live.” The electrician said he was lucky his job was a higher paying trade but it was “still so hard just to get a house”. “The budgeting for my lifestyle is completely different to what it was. I used to get a coffee, once or twice a day, but now I can’t even get that because that little bit of saving helps with the bills and the mortgage. “I’m looking at $1000 weekly repayments on my mortgage plus bills, which I budget around $600 to $800 a week. “It’s a lot of money each week when you barely make that much through your weekly wage.” Perth has become the sixth capital city to hit the $1m median house price, following Adelaide in April last year. The latest WA suburbs joining the million dollar milestone are Bayswater, Bedford, Canning Vale, Darch, Hilton, Madeley, Padbury, and Roleystone. The Real Estate Institute of Western Australia president Suzanne Brown said it was a “perfect storm” fuelling the increasing prices. “We’ve had years of new home completions that have been very low and that’s pushed people to the established market and we’ve seen a lack of land supply,” she said. “House listings have declined and demand is really high, which is obviously increasing the competition for limited supply, which in turn, people are offering more out of desperation and that’s fuelling the higher prices. “The Federal Government brought forward their First Homebuyer Scheme to October when it was meant to start in January this year, although it’s helped a few more people get in the market, it has also fuelled prices further. “We have too much demand and not enough supply, so we need mobility in the market.” Ms Brown reminded those still looking for a home that there was still houses available under the median house price. There are still several suburbs with median house prices under $1 million with homes in Midland, Northbridge, Medina, Armadale, and Osborne Park all recording an average cost of between $570,000 to $596,000. Perth, Mandurah, Greenfields, Parmelia, and East Perth have median house prices from $605,000 to $620,500. “We do need to remember the median is the middle. I’m not saying it’s easy as there is very tight supply under the median house price but it’s just compromising a little bit on what you’re looking for,” Ms Brown said. “People need to have their finances in order. They need to, unfortunately, act quite quickly when they something they like, talk to the agent about how to make their offer more attractive, and be open to things like long settlements.”