Perth’s property market could see a sharp acceleration in price growth from early 2026, driven by expanded state and federal incentives aimed at first-home buyers.
That’s according to Perth-based buyer’s agent Peter Gavalas (pictured) of Resolve Property Solutions, who says the policy changes will increase competition across the popular sub-$850,000 price bracket.
“First-home buyers will be able to enter the market with the federal government’s expanded Home Guarantee Scheme that allows just a 5% deposit and no lenders’ mortgage insurance,” Gavalas said.
“On top of that, the Western Australian government has slashed stamp duty for homes in Perth up to $500,000 and offered partial relief up to $700,000. That’s going to bring a lot more buyers to the table.”
The momentum comes as housing affordability improves nationally for the first time in a year. According to the Real Estate Institute of Australia, the March 2025 quarter saw the biggest quarterly gain since 2016 – driven by a 1.1% rise in median family income and a 2.9% drop in average loan repayments, following the Reserve Bank’s February rate cut.
During its election campaign, the re-elected Labor government confirmed it would expand the federal Home Guarantee Scheme – previously capped at 35,000 places annually – to allow unlimited access for all first-home buyers.
The scheme, which enables purchases with just a 5% deposit and no lenders’ mortgage insurance, will still cap eligible properties in Perth at $600,000. The expanded version takes effect from Jan. 1.
When combined with WA’s revised stamp duty concessions, the changes are expected to significantly boost demand in the market’s most active segment.
The city’s median house price reached $813,810 in May, according to Cotality (formerly CoreLogic), putting most of Perth’s housing stock within or near the critical price brackets influenced by these policies.
“Properties between $550,000 and $800,000 are going to get even more competitive,” Gavalas said.
“First-home buyers will soon have more firepower – but in a market where supply isn’t growing fast enough, that could mean faster sales, stronger offers and more bidding wars.”
Gavalas urged first-home buyers to take a proactive approach.
“The challenge will be navigating this competition. They’ll need their finances sorted and must act decisively when the right property appears,” he said.
While these policies are designed to help first-time buyers, the impacts could extend well beyond this group.
“There’s a risk some buyers could overextend themselves out of fear of missing out,” Gavalas said.
The boost in first-home buyer purchasing power comes as investor activity softens.
The Australian Bureau of Statistics reports that new investor mortgage commitments in WA have declined for three consecutive quarters, falling 4.3% between December 2024 and March 2025.
“Investors who don’t adapt will struggle to compete with owner-occupiers empowered by these incentives,” Gavalas said.
He added that investors may shift focus to different market segments or properties with renovation or development potential.
While the full market impact remains to be seen, Gavalas expects price growth to accelerate once the policy changes take effect in early 2026.
“When demand rises and supply doesn’t, prices go up – it’s that simple,” he said. “These incentives are a win for many first-home buyers, but they’ll also turn up the heat in an already pressured market.”
