Perth Property Prices Heading Toward $1 Million: What It Means for You

Perth’s property market is pushing toward a million-dollar median. In this article, I break down what that means for first-home buyers, investors, upsizers and downsizers, and why WA’s current stamp duty settings may be out of step with reality.

Predictions that Perth may push toward a one million dollar median are not noise, they signal that structural pressure is building across the whole property market. Low supply, strong migration, limited building capacity and steady demand are all interacting at once. Even if growth slows, prices are already operating from a much higher base.

Every segment of the market is being reshaped, just in different ways. The Federal Government has made it easier for first home buyers through the First Home Guarantee, allowing smaller deposits and earlier entry into the market, but Western Australia has a problem, stamp duty policy has not kept pace with real purchase prices, and it is now working against the federal support settings. That gap matters. If you’re feeling unsure what this means for your own buying power, talking to your home loan guy early gives you clarity before prices move further. It is about understanding what you can actually borrow now, not guessing.

What rising prices mean for first home buyers

First home buyers are still under the most pressure. Higher entry prices combined with stamp duty can easily wipe out the benefit of federal schemes. Buyers spend years saving, qualify for support, then discover the property they want sits above the WA stamp duty thresholds. If thresholds do not reflect real market prices, support becomes theoretical and buyers end up chasing shrinking opportunities.

The obvious solution is to increase the stamp duty exemption threshold and index it properly. That way it stays aligned with the federal intent instead of working against it.

How investors benefit (and what they should watch)

Investors sit in a more complex position. On the upside, rising values create opportunity. Increased equity can be used as security for a first investment purchase or to expand an existing portfolio. Done properly, this can accelerate long term wealth building, but equity is not free money, it still needs to be repaid.

Without strong buffers and disciplined planning, interest rate pressure can hurt fast. There is also yield risk, if prices climb faster than rents, returns compress. Some investors will still buy for growth. Others will step back. That can reduce future rental supply. Opportunity exists, but speculation is the weak link.

What upsizers and downsizers need to know

Upsizers get caught in the value gap, they sell higher then they need to buy higher again. The gap between what they own and what they want stretches further, borrowing increases,risk increases, and stamp duty sits in the middle like a toll gate.

For many families, the numbers simply stop working. So they stay where they are. That reduces market movement and keeps supply tight.

Downsizers should theoretically benefit the most in a rising market, they sell larger homes at strong prices, but the smaller homes, villas and townhouses they want have also risen sharply. Add stamp duty back in and the incentive to move can disappear completely so they hold on longer.

Larger homes stay occupied and stock does not recycle back into the market.Once again, policy friction is doing part of the damage.

So where does that leave buyers today? Before you stress about timing and strategies, speaking with your home loan guy early will show you what is realistically possible in this market.

Refinancing

Refinancing is one of the quiet winners in this environment, if handled correctly. As values rise, loan to value ratios fall, lower LVRs can unlock sharper risk-based pricing, which means better rates than you may currently have.Refinancing can also be used to restructure the loan correctly. Offsets, splits, cleaning up expensive personal debts, removing junk fees and tightening cash flow, these are sensible outcomes.

The risk sits in the temptation to pull out equity and spend it, that usually turns a smart refinance into a long term cost problem.

How all of this connects

None of these groups operate in isolation. Downsizers who cannot move block upsizers. Upsizers who cannot move block first home buyers. Tight rental supply pushes renters to buy, which lifts prices further and changes investor behaviour.

Federal support is pulling people into the market, while WA stamp duty policy is still pushing them back out. That contradiction needs to be addressed.

The million-dollar headline gets attention, but the real story is what is happening underneath the surface. Low listings are creating pressure. If you want to see how that plays out for buyers, I have explained it in more detail here.

Why stamp duty policy needs to change in WA

Ignoring stamp duty while prices accelerate is short sighted.

WA should be reviewing:

• exemption thresholds

• automatic indexation

• targeted relief for modest, owner-occupied homes

• alignment with federal support programs

This is not about giveaways. It is about removing artificial barriers that were designed for a cheaper era.

Final thought

Rising prices do not create one story, they create very different outcomes depending on whether you are buying, selling, investing, refinancing or retiring.

Federal policy has shifted to help people participate, it is time for WA stamp duty settings to shift as well.

Bottom line, if Perth keeps pushing toward the million-dollar mark, getting clear on your borrowing power early matters more than ever, I've laid out the practical steps here and that is where your home loan guy helps you move with confidence instead of uncertainty.

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