December marked a clear shift in tone across Australia’s housing market. Not a collapse, not a boom, but a transition. National growth continued, though at a slower pace, and headlines became louder than the underlying reality. This is where context matters. 

According to Cotality, the National Home Value Index recorded its smallest monthly increase in five months in December. Importantly, this moderation was not broad based.

It was driven almost entirely by Sydney and Melbourne, where values declined month on month, marking the first pullback across Australia’s two largest markets since early last year. Every other capital city and most regional markets recorded price growth. 

In simple terms, the so called “national slowdown” is really a two speed market. Eastern states are adjusting under affordability pressure, while supply constrained markets continue to be supported by genuine demand. Perth sits firmly in the latter camp. 

Perth remains one of the strongest performing capital city markets in the country. While month on month growth moderated through December, as is typical heading into the Christmas period, the underlying fundamentals remain intact.

REIWA data shows Perth’s rolling median house price lifted to approximately $842,000, reinforcing its position as a national outperformer. 

Rental conditions remain tight, with median house rents holding around $700 per week and unit rents around $670 per week. Vacancy rates remain near historic lows. This is not speculative demand; it is structural undersupply meeting sustained population growth. 

This distinction matters. Perth’s relative affordability, stronger income to price ratios and ongoing supply constraints mean it is better positioned to absorb higher for longer interest rates than Sydney or Melbourne, where demand has proven far more rate-sensitive. 

Stock levels continue to define the Perth market. According to REIWA, Perth metro listings fell sharply to just 1,862 properties in December, representing a 36% month on month decline driven largely by seasonal withdrawals. On a year on year basis, available stock was down approximately 56.8%. 

While sales volumes eased into the Christmas period, averaging around 142 transactions per week the absence of stock, not the absence of buyers, remains the dominant force supporting prices. Quality homes in well located areas continue to attract competition. 

Within the City of Melville, these dynamics are even more pronounced. The median house price rose 2.29% in December to approximately $1.45 million, taking quarterly growth to just over 3% and annual growth to close to 12%. 

These are not the indicators of a market losing momentum but of one constrained by scarcity. 

December recorded roughly even levels of sales and new listings, producing a sales to stock ratio of around 50% and a median of just nine days on the market. Even during a seasonal slowdown, well priced homes continued to transact quickly. 

Across MGP’s core suburbs, including Alfred Cove, Ardross, Attadale, Bicton and Melville, available stock fell by roughly 32% from November.

Notably, there were no houses available for sale in Melville itself at the end of December, an exceptionally rare outcome that highlights how tightly held this pocket remains. 

At a broader level, the Australian housing market continues to operate against a backdrop of elevated household leverage, with household debt sitting at around 114% of GDP.  This has not triggered widespread distress, but it has changed buyer behaviour.

Buyers are more selective, more cautious, and less willing to stretch beyond fundamentals. 

That shift explains why overoptimistic pricing is being punished more quickly, particularly in higher-priced eastern markets. The market is no longer rewarding optimism; it is rewarding accuracy. 

Looking ahead into 2026, higher-for-longer interest rates and affordability constraints are likely to keep national growth more measured than what we saw through much of 2025. That does not point to a correction, but it does signal a more disciplined and segmented phase of the cycle. 

In Perth, and particularly within blue chip local government areas such as the City of Melville, structural undersupply remains a powerful support. As stock levels reset in the new year, buyer demand is expected to reemerge quickly, especially for well located family homes. 

For sellers, this is still a market that rewards quality, presentation and pricing accuracy, but it is far less forgiving of overpricing or lazy strategy. For buyers, being finance ready and decisive remains critical, as genuine opportunities continue to attract competition. 

The takeaway is simple. This is not a market driven by hype or fear. It is a market shaped by scarcity, balance sheet realism and quality differentiation.

In that environment, clear advice and local knowledge matter more than ever, and that’s the reality beneath the headlines. 

Watch our December Market Update to understand what’s really supporting Perth’s market heading into 2026.