On September 29, the RBA lifted the cash rate for the fourth time this year, to 4.60%, the highest level since 2011.
After several years of extraordinary growth in Perth residential values, the tax changes to negative gearing and capital gains in May, together with higher borrowing costs, are cooling the Perth market.
Listings are rising and homes are taking longer to sell, giving buyers more choice and more time to decide. In September, Perth had 7,755 properties listed for sale, 165% more than a year earlier, though that remains well below the 13,000-plus typical of 2018 and 2019.
WA housing affordability is at its lowest level on record, according to REIA, and repayments now take a larger share of family income than at any point since REIA began collating data 30-years ago.
That’s a very different environment from 12 months ago or even five months ago.
The growth story is intact
Has this changed the WA outlook? Not fundamentally.
WA is still growing faster than any other state or territory. The State added more than 64,000 people in the year to March 2026, taking the population to almost 3.1 million. Perth still needs more housing, more industrial space and more infrastructure.
The new Henderson Defence Precinct carries an initial $12 billion funding commitment and is expected to support around 10,000 direct jobs over the next two decades.
Add major investment across energy and resources, and the flow-on demand extends well beyond housing into industrial space, logistics and essential infrastructure.
That came through clearly at our recent Perth event with Urbis and Lavan: WA’s underlying economic fundamentals continue to support long-term growth.
Supply is getting harder to deliver
The tension is that Perth needs more supply, but delivering it is getting harder.
Higher RBA rates flow through to funding costs, purchaser borrowing capacity, project feasibility and, ultimately, the returns developers need to justify taking risk.
Construction isn’t getting easier either. Across Australia, the cost of building a new home is now reported to be around 51% higher than in 2019. In WA, that pressure is compounded by brick supply constraints, with the State’s only major brick producer introducing customer allocations on 1 October.
What this means for lending
Capital is more expensive, buyers are more cautious, feasibilities are tighter and lenders are asking harder questions.
That separates projects built on genuine fundamentals from those that relied on a rising market. As momentum slows, the details of a deal carry more weight: location, genuine demand, sponsor capability, project margins and a clear pathway to repayment.
For lenders, the next phase isn’t about chasing growth. It’s about supporting the projects that genuinely make sense , and I think that’s the right approach.
Our role is to understand why a project needs alternative capital, whether the project justifies the risk and whether the structure provides appropriate protection for investors.
The opportunity hasn’t disappeared. The bar has risen, and we’ll be ready to support the right projects.
Want more insights like this? Follow Adam Moorby on LinkedIn.
Article written by Adam Moorby – State Director – WA
The commentary in this article in no way constitutes a solicitation of business or product advice. It is expressed solely as the opinion of the author, and as general information for the reader. It is not information to be relied upon in making investment decisions.
Related Articles
FY2025/26 was a year worth measuring carefully
0 Comments3 Minutes
The good news and the harder news, together. That’s how we’ve always reported.
Australia’s Immigration Debate: You Can’t Build More Homes with Fewer Builders
0 Comments12 Minutes
Australia needs more housing and infrastructure, but both depend on having the people to build…
Two States, One Shortage: Why we’re backing Adelaide and Perth
0 Comments5 Minutes
Adelaide and Perth could hardly be more different. But they share a single, defining feature:…
"*" indicates required fields
