Not Just One Market: Why Perth’s Property Story is More Complex Than You Think

Anyone following the headlines knows Perth property is running hot. Record price growth and homes selling in days are the standard story. But if you look past the city-wide median price, a more complex and fascinating picture emerges.

Right now, there isn’t just one Perth market. There are at least two distinct markets operating in parallel, driven by entirely different forces but both constrained by one critical factor: a chronic lack of supply.

The Engine Room: Growth Corridors and the Affordability Crunch
In the sprawling growth corridors to our north, south, and in the eastern hills, the market is being driven by an intense search for affordability. Young families, skilled migrants, and first-time buyers are flocking to suburbs from Alkimos to Baldivis, seeking a foothold in a market that feels increasingly out of reach.

The demand here is enormous, but it’s colliding with a construction industry under immense strain. With labour shortages and material bottlenecks still causing significant delays, the gap between the number of buyers wanting a new home and the industry’s ability to deliver one has never been wider. This isn’t just a demand story; it’s a narrative of a supply chain struggling to keep up, turning every new land release and house-and-land package into a feeding frenzy.

The Blue-Chip Anchor: Scarcity and the Lifestyle Premium
Meanwhile, in Perth’s established “blue-chip” suburbs, a different dynamic is at play. In riverside and coastal enclaves from Mosman Park to Trigg, the issue isn’t building new homes—it’s that existing ones rarely come up for sale.

Here, the market is driven by wealth preservation and the ultimate lifestyle appeal. The owners are often long-term residents who are “locked-in”—they have no desire to move, and even if they did, they’d struggle to find a suitable replacement in the same tightly-held area. This creates a cycle of extreme scarcity.

When a property does hit the market, it attracts fierce competition from established families, high-income professionals relocating for the resources sector, and downsizers unwilling to compromise on location. The result is a market defined not by rapid expansion, but by the relentless, quiet pressure on a near-zero inventory of homes.

The Common Denominator: The Rental Crisis
Tying these two markets together is the rental crisis, which now acts as the great accelerator. With vacancy rates hovering below 1%, the pressure is immense.

Tenants in blue-chip suburbs who are priced out of renting are forced to look for properties to buy in the more affordable outer rings. At the same time, the allure of high rental yields is attracting investors back to the market, adding another layer of competition for first-home buyers. The rental squeeze ensures that no part of the market is an island; the pressure in one area inevitably flows into the next.