Perth Housing Shortage: What Falling Listings Really Mean for Buyers in 2026

Perth property supply is tightening, and listings are sitting well below what a balanced market usually needs. Let's break down what the current housing shortage means for first home buyers, upsizers, investors and downsizers, and how to approach the market with a clearer plan.

If you have been following the conversation around Perth moving toward a million-dollar median, this is the other side of that story.

Perth is not just busy right now, it is tight. The number that matters most at the moment is not price, it is supply, with fewer homes coming to market, competition increases, days-on-market shrink, and multiple offer situations become normal. If you are not ready, that can become stressful, costly, and frustrating. That is why preparation matters more than ever. I have put together a guide on how Perth buyers can position themselves to stay ahead of this market here.

Let’s talk about what this actually means in real life, not just in headlines, and more importantly, what you can do about it. With listings tightening and competition rising, the first step any buyer should take is to understand their borrowing capacity. Speaking with your home loan guy early will show you exactly what you can borrow before you start comparing properties.

What low housing supply actually does to the Perth market

When supply tightens, three predictable things happen:

1. Sellers gain leverage.

2. Buyers lose negotiation power.

3. Prices feel like they are running away.

That is exactly the environment we are in right now, but it does not affect everyone in the same way. So what does this shortage mean for you? Before you get caught chasing listings that disappear overnight, talking to your home loan guy early gives you realistic boundaries to work within. Here is how it plays out for different buyers.

First home buyers in Perth: why preparation beats luck

This group feels the pressure first.

A tight market means:

• more people at every home open

• fewer properties that feel affordable

• less room to negotiate

• faster decision timelines

Here is the blunt (but respectful). If you are looking without pre-approval, without a clear budget, and without realistic suburb expectations, you are competing from behind, that does not mean you cannot buy, it means the strategy changes.

The smarter approach:

• understand your borrowing limits first

• shortlist realistic suburbs

• stay flexible on features

• be ready to move when the right property shows up

Waiting for the market to magically cool has cost more buyers money than carefully moving sooner, and yes, WA stamp duty policy really does need review, because it is working against people at entry level.

If you want more context on why prices are behaving the way they are, I covered it here.

Upsizing in Perth: equity helps, but planning matters more

If you bought some time ago, you probably have equity now, that part is positive, equity creates options.

But upsizers can fall into a trap. They assume “We made money on this place, so the next step will be easy.”

In a tight market:

• you might sell quickly

• buying back in can be harder than expected

• bridging can get stressful

• the gap between prices can widen

My take:

Upsizers should be planning earlier, map the numbers, decide whether buying first or selling first makes sense, understand lending rules before committing.

Done well, upsizing now can be a really strong move, but rushed, it becomes stressful very fast.

Perth investors: opportunity is selective, not automatic

Investors often see low supply and assume it guarantees price rises and rental growth.

Sometimes that happens, not always.

Smart investors look deeper and focus on:

• genuine tenant demand

• realistic rental returns

• long term suburb drivers

• proper loan structure and cashflow

The positive here is that rising values can free up equity, that can support growth, but only if the lending side is structured properly. With lower LVRs, refinancing may improve flexibility and pricing, that creates breathing room, not just expansion opportunity. This is the part where conversations matter more than headlines.

Downsizing in Perth: strong selling conditions, tricky buying conditions

Downsizers are in a mixed position.

Selling is generally easier. Homes that are well presented and in the right pockets move quickly. Buying is often harder, there is less choice and more competition than expected, there is also emotion. Leaving the family home is already a big decision, doing it inside a tight market can feel rushed.

My advice:

Treat downsizing like a project, look at settlement timing, consider bridging carefully, get clarity on borrowing capacity, and understand what is realistic in your target suburbs.

Done thoughtfully, downsizing can free up lifestyle and cashflow, but done quickly, it can box you in.

What buyers should takeaway from Perth’s housing shortage

Low supply is one of the biggest drivers behind current price behaviour, it is not the only factor, but it is a major one.This is why buyers today need planning, clarity, and strategy, not guesswork. If you want context on how supply connects with price pressure, it is worth reading my earlier post about Perth moving toward the million-dollar mark. The two topics belong together.

Bottom line, in a market with fewer homes and more competition, certainty is your advantage. Getting clear on your borrowing power with your home loan guy early lets you move with confidence instead of hesitation.

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