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Australia’s plan to build its way out of the housing shortage has hit another delay. Fresh national analysis shows the target of 1.2 million new homes, originally set for the middle of 2029, is now not expected to be reached until late 2030, a slip of around 18 months. For anyone who owns a home in Perth, or is thinking about buying or selling, this is worth understanding, because a supply shortage that keeps getting worse has real flow on effects for prices and rents. Here is the plain English version. Why the target keeps slipping The National Housing Supply and Affordability Council points to a combination of pressures. Building completions are down around 4 per cent nationally over the past year, and Western Australia is one of the states going backwards, with completions down about 9 per cent. In other words, we are finishing fewer new homes here, not more. Cost is the biggest culprit. House construction costs rose again in the June quarter and are now more than 50 per cent higher than they were before the pandemic. Add three recent interest rate rises, global cost pressures and a genuine shortage of tradespeople, and a lot of projects simply no longer stack up financially for developers. Master Builders Australia has also pointed to the federal changes to negative gearing and capital gains tax as discouraging new investment in housing. There is one important nuance. Building approvals are actually improving, but an approval is not a finished home. Turning a plan into a completed house takes time, trades and confidence, and all three are in short supply right now. What tighter supply means for Perth This comes down to simple supply and demand. When fewer new homes are being built into a market with strong population growth, pressure stays on both prices and rents. Perth is already one of the tightest markets in the country. Values have risen strongly over the past year and rents are still climbing at around 8 per cent annually. A worsening national shortage does not ease that pressure, it reinforces it. For existing owners, that scarcity is a big part of why Perth property has held its value so well while other capitals have softened. If you are thinking of selling A shortage of new stock means established, move in ready homes stay in demand. Well presented homes in sought after Perth suburbs continue to attract genuine buyers. That said, buyers are more cautious now that rates are higher, so realistic pricing and strong presentation still matter. The shortage supports your position, but it does not remove the need to price to today’s market rather than last year’s peak. If you are thinking of buying Waiting for a wave of cheap new homes to arrive is a risky strategy when completions are actually falling. Meaningful new supply is years away at best, so competing for existing homes is likely to stay the reality for some time. Getting clear on your budget and finance early puts you in a much stronger position to act when the right home comes up. My take The headline sounds negative, but for existing Perth owners a structural housing shortage is a large part of why local property remains so resilient. Understand where your own home sits, plan and price sensibly, and you can make confident decisions regardless of the national noise. If you would like to know exactly what your Perth home is worth in today’s market, I am always happy to help. Request your free property report Get a free, no obligation report tailored to your suburb and street. It takes less than a minute and gives you a clear, current picture of your home’s value. Suresh Sama, Real Estate Consultant, First National Real Estate RS Group Call or text: 0452 512 396 Email: suresh@fnrsgroup.com.au

National headlines have taken a nervous turn this month. The country’s largest home builder has warned that a softening market is stalling new construction, and fresh lending data shows buyers pulling back for a second quarter in a row. If you own a home in Perth, or you are thinking about buying or selling, it is fair to ask what all of this means for you. The short answer is that Perth’s story is very different from the national one. Here is what is actually happening. The national picture: confidence has cooled Metricon, the biggest home builder in the country, reported that sales dropped sharply in some markets last month, and its chief executive put it down to a slump in buyer confidence. The logic is simple. People are far less likely to commit to building a brand new home when they are unsure where established prices are heading. The lending figures tell a similar story. According to the Australian Bureau of Statistics, new loan commitments fell across the board in the June quarter. Investor lending saw the biggest drop, down more than 8 per cent, its steepest fall in around three and a half years. Loans to owner occupiers and first home buyers also eased back. Two things are driving this. Interest rates have climbed, which trims how much people can borrow, and there is ongoing uncertainty around federal changes to negative gearing and capital gains tax. Faced with that mix, a lot of buyers are simply sitting on the fence and waiting for clarity. The catch for the construction industry is obvious. When buyers wait, fewer new homes get built. Even here in WA, Perth apartment developer Finbar noted softer interest in its mid priced units as buyers held off. Perth is easing too, but from a position of real strength It would be wrong to say Perth is immune. National values slipped in July, and Perth’s own momentum has clearly slowed, with the market roughly flat for the month and a small dip over the quarter, according to Cotality. But context matters enormously here. Perth values are still up around 20 per cent over the past year, the strongest annual result of any capital city, with the median dwelling value now sitting just above one million dollars and only a fraction below its recent peak. After five years of exceptional growth, most Perth owners are holding substantial equity, and analysts point out that Perth has one of the largest price buffers of any capital. Even a significant pullback would only unwind a portion of recent gains. Rents also remain very tight, with annual growth still running near 8 per cent, which continues to support investor interest even as new lending softens. So the national mood is cautious, but Perth is easing gently from a genuinely strong base rather than falling off a cliff. What this means if you are thinking of selling The good news is that most Perth sellers are in a strong equity position, and well presented homes in sought after suburbs are still finding buyers. The important shift is pricing. Listings are rising, which gives buyers more choice and a little more room to negotiate. That means homes priced to yesterday’s peak are the ones that tend to sit, while realistically priced homes still move well. Holding out for a higher peak is a gamble when momentum is clearly easing, so pricing to today’s conditions is the smarter play. What this means if you are thinking of buying Buyers now have more choice and more negotiating power than they did a year ago, which is a welcome change. The trade off is that borrowing capacity has tightened after recent rate rises, so knowing your numbers before you start looking matters more than ever. A current pre approval gives you a clear budget and real confidence when you find the right home. My take It is easy to read a national headline about a property slump and assume the worst. But Perth continues to sit in a stronger position than almost anywhere else in the country. The market is not booming the way it was, and that is actually healthy. For sellers it means pricing sensibly and presenting well. For buyers it means acting with a clear budget rather than waiting endlessly for a bottom that Perth may never really see. If you want to know exactly where your own home sits in today’s market, that is where I can help. Ready to find out what your Perth home is worth right now? Get a free, no obligation property report tailored to your suburb and street. It takes less than a minute to request and gives you a clear, current picture of your home’s value. Suresh Sama 0452 512 396 Real Estate Consultant, First National RS Group

Perth is currently the hottest real estate market in Australia—outperforming every other capital city with strong price growth and solid economic fundamentals. But what does that mean for those looking to get into their first home? Despite rising prices and increased competition, first-home buyers (FHBs) in Perth still have a real opportunity to break into the market—sooner than they might think. Perth’s Market is Booming—And Still Growing Western Australia’s economy is leading the nation, with Perth home prices climbing steadily while other cities saw declines. In fact, Perth was one of just two cities where home values increased in December 2024, capping off an impressive 17.59% annual growth, according to PropTrack Senior Economist Anne Flaherty. Several factors are driving this: But even in this competitive environment, there’s still room for first-home buyers to make their move.

In a move set to reshape the Australian housing landscape, the Reserve Bank of Australia (RBA) has reduced the official cash rate by 0.25%, bringing it down to 3.85%—its lowest point in more than two years. This marks the second rate cut of 2025 and the first since the federal election, sending a clear signal that the RBA is responding to easing inflation and a more fragile global economic outlook. “Mortgage Repayments has estimated the savings Australians could see across different loan sizes, based on a current average mortgage rate of 6.01% for new borrowers.” Remaining repayment Monthly repayments (assumed current rate of 6.01%) Monthly repayments with a 0.25% cut $1,000,000 $6000 $5840 $750,000 $4500 $4380 $500,000 $3000 $2920 $250,000 $1500 $1460 So what does this mean for buyers, sellers, and the broader property market? Buyer Confidence Rebound With interest rates now at their lowest since early 2023, borrowing power is set to increase, giving prospective buyers a significant boost in confidence. Some economists estimate that average borrowing capacity could rise by up to $75,000. While affordability has been a concern for many Australians—especially following the prolonged rate hike cycle—this cut is expected to revive demand, particularly among first-home buyers and upgraders. Will Property Prices Rise? According to industry experts, including PropTrack economist Eleanor Creagh, property prices are expected to continue rising, although at a more modest pace compared to the boom years. “The rate of growth is likely to be more modest compared to recent years,” Ms Creagh said. “The trade tensions and volatility in global markets have escalated, reinforcing the need for caution and flexibility in setting policy.” Nevertheless, the combination of lower interest rates and a still-tight housing supply could nudge prices upward, especially in popular growth corridors and family-friendly suburbs.