Perth median home price expected to overtake Melbourne’s in coming weeks

Perth’s median property price is poised to overtake Melbourne in the coming weeks as a critical under­supply of homes puts pressure on the market.

Lake Monger skyline in Perth. NCA NewsWire / Sharon Smith

Perth’s median property price is poised to overtake Melbourne in the coming weeks as a critical under­supply of homes puts pressure on the market.

Housing researcher PropTrack’s monthly Home Price Index for April showed Melbourne’s median property price currently rests at $781,000, $2000 higher than Perth’s median of $779,000.

In the past five years, home ­prices in Perth have risen 83.8 per cent, while Melbourne has gained 16.2 per cent in the same period.

REA Group senior economist Anne Flaherty said Perth could surpass Melbourne in less than a month.

“It could’ve happened in April but actually (that month) we saw home prices in Melbourne increased more rapidly than in Perth,” she said.

Ms Flaherty said Perth was facing a continued undersupply of dwellings available for sale because of high development costs compared to property values, which made homes unattractive to build.

“It’s quite extraordinary,” she said. “The rate of home price growth that we’ve seen in Perth in recent years has far outstripped Melbourne.

“This is particularly the case in the apartment market, where the cost per square metre of building apartments and townhouses in Western Australia … is very high, particularly in comparison with where those (property) prices are sitting.

“So we’re not really seeing many of that kind of property ­developed.”

Realestate.com.au economist Anne Flaherty.

Property prices rose a modest 0.2 per cent nationally last month, led in the capital cities by gains of 0.3 per cent in Adelaide and 0.25 per cent in Melbourne.

The ACT (up 0.2 per cent) was closely followed by Brisbane (up 0.19 per cent), Darwin (up 0.15 per cent) and Hobart (up 0.11 per cent). Perth and Sydney rose a minor 0.1 per cent.

The former president of the Real Estate Institute of Australia and principal of Fremantle-based Ray White Dethridge Groves, Hayden Groves, said he expected Perth’s property values to continue to rise into 2026 but at a slower rate compared to recent years. “We wouldn’t be surprised to see double-digit returns in the Perth property market this year,” he said.

REIA president Hayden Groves.

The PropTrack data comes days out from the federal election.

Both Anthony Albanese and Peter Dutton have pledged to tackle housing affordability, ­particularly for first-home buyers.

Labor has promised $10bn to build 100,000 new homes ­exclusively for first-time buyers and expand the popular low-­deposit Home Guarantee Scheme.

The Coalition’s plan would allow market entrants to claim a tax deduction on mortgage interest payments for the first five years and access up to $50,000 from their superannuation for their deposit.

Economists increasingly expect homeowners across the country will get some relief on their mortgage payments when the Reserve Bank meets in three weeks, on the back of positive quarterly inflation figures released on Wednesday.

In Perth, Mr Groves said he believed that regardless of which party formed government following this weekend’s poll, there could be a minor surge in home buying, particularly among first-home buyers, who would most benefit from each party’s policies.