It’s the middle of winter, and it’s getting chilly out there. But it’s not just the air temperature that’s cooling down. Most experts believe that the Australian property market is cooling down as well, and when you look at the data it’s hard to argue.
Of course, just how much it’s cooling very much depends on where you live.
So let’s take a dive into what’s happening at national level, and then zero in on our local property market.
Every capital city is different.
In the capital cities of Sydney and Melbourne, auction clearance rates have declined substantially. In Sydney, for example, the latest auction clearance rate is around 47%. This means more than half of the reported auction properties are not selling through the auction process. 12 months ago, the auction clearance rate in Sydney was around 68%, which meant two out of three auctions were selling under the hammer – not anymore.
In Melbourne, it’s marginally better. In the latest data, auction clearance rates are sitting at around 49%. This is down from around 70% at the same time last year.
There are a few reasons for this; higher interest rates are biting harder in Sydney and Melbourne where the cost of buying a property is higher, on average, than any other capital city. Also, after three rate hikes in 2026, any additional interest rate rise on an average $800,000 loan can be the tipping point for some potential home loan buyers (or their lender) to walk away. In fact, some banks have also started tightening their lending conditions.
For recent homebuyers in Sydney and Melbourne, mortgage stress (and cost of living pressures) is spreading from outer suburban mortgage belts into affluent neighbourhoods with the average home loan consuming nearly half of median family incomes.
In the last three months, house prices in Sydney have fallen 3.2%. In Melbourne there has been a fall of 2.6%. (It’s not a crash by any means, but it is a correction that most experts believe has some way to play out).
By comparison, the capital cities of Brisbane, Adelaide and Perth are still growing, but at a slower rate than six months ago. Perth, in particular, is still considered an affordable city to live in. Then when you add Western Australia’s strong population growth, which is the fastest growth rate in the country by the way, plus a tight housing supply, there’s less chance of a significant downturn in the property market. (more of this shortly).
So what’s happening in the Greater Perth property market?
At some point, the growth of the red-hot Greater Perth property market was always going to cool down. While prices remain near record highs, the speed at which properties are selling has eased.
Based on the latest data from REIWA, homes are currently selling in a median of 16 days. By comparison, in the early part of 2026, the average selling time was around 7 days. So that’s a significant cooling in buyer demand, which is a strong indicator of a market in transition. In fact, we’re now seeing an increasing number of properties selling at or below their listing price.
This does not mean property prices will collapse. (no one is suggesting this by the way).
It’s more that our local market is normalising, which is a good thing for both buyers and sellers. As we start a new financial year, the resilience of the Greater Perth property market, including the broader Peel Region, is a strong feature.
Key factors such as population growth, housing construction that lags pent-up demand, comparatively affordable property market, and tight rental vacancies are not going to change anytime soon.
One recent forecast by the Real Estate Institute of Western Australia predicted house prices in Greater Perth to increase by more than 10% in 2026, with units potentially rising 15–20% over the same time period.
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