Perth's property market has been gaining ground and is now on the cusp of a major milestone, according to Domain's latest forecast report.
The city's median house price is expected to reach $982,000 by June next year and cross $1 million by the end of 2026.
If the forecast plays out, it will join Sydney, Melbourne, Brisbane, Adelaide and Canberra, which also have million-dollar medians, according to Domain.
Nicola Powell, chief of research and economics at Domain, said Perth's growth is being fuelled by a mix of factors.
"Perth's momentum is being driven by lower interest rates, high income growth and the strongest population growth out of any of the other capital cities," she said.
"Affordability is also less of a concern compared to the other cities, where residents have a lower mortgage-to-income ratio."
Powell said while affordability is a growing issue across the country, buyers in Perth typically face a lower mortgage burden compared to those in other cities, giving them more flexibility and helping to sustain demand.
House prices rise across Australia
Across the rest of Australia, Domain forecasts house prices will continue to rise, although more steadily than during the pandemic-era boom.
Sydney is expected to lead the charge, with a predicted 7 per cent increase over the next financial year, which would push its median house price to a record $1.83 million — a $112,000 jump in just one year. Melbourne is forecast to grow by 6 per cent to reach $1.11 million, fully recovering from its downturn.
Brisbane and Adelaide are also expected to reach new highs, with forecast growth rates of 5 per cent and 4 per cent, respectively.
Canberra is on track for a 4 per cent rise, bringing its median to $1.1 million, still below its 2022 peak but heading upward.
"The double-digit growth that we have seen out of cities like Adelaide, Brisbane and Perth in recent years has been spurred on by a variety of factors, including a chronic undersupply of housing, first home buyer support and relative affordability compared to cities like Sydney," Powell said.
"While prices will continue to rise across all capitals, the rate of growth in these cities will be slower than we've seen due to stretched affordability. Their previous relative value advantages have now decreased.
"Other factors that could cause downward pressure include elevated economic uncertainty, which impacts consumer confidence and demand for housing."
What could impact prices?
According to Powell, lower interest rates are also playing a key role in price growth.
The Reserve Bank of Australia has already cut rates by a total of 0.5 per cent in 2025.
Powell said markets are expecting a further 0.8 per cent in reductions by mid-2026.
At the same time, the report notes there are not enough new homes being built to ease pressure, and while construction costs have started to level out, delays caused by labour shortages and planning bottlenecks are keeping supply tight.
Domain expects the national housing shortfall to continue well into 2026.
Meanwhile, the report highlights a continued undersupply of housing. While construction costs have started to stabilise, delays caused by labour shortages and planning hold-ups are slowing delivery. Domain expects the national housing shortfall to persist well into 2026.
Population growth is also forecast to slow slightly, including in Western Australia. While that may ease some pressure on demand, strong rental activity, rising wages and limited stock are likely to keep prices trending upward.
Government support is another factor lifting demand. Expanded first-home buyer schemes, including the scrapping of lenders' mortgage insurance, are helping more people enter the market, particularly in more affordable areas, as per the report.
