Two big events. One week. What they mean for the Perth property market.
Tomorrow, the RBA hands down its May rate decision — and almost every major bank is tipping another 25 basis point hike, which would take the cash rate to 4.35% and fully unwind the three cuts we saw in 2025. Then on the 12th, Treasurer Chalmers delivers the Federal Budget — with potential changes to negative gearing and the CGT discount sitting front and centre.
So what does all of this mean for Western Australia?
Here's my read:
Perth has been one of the most resilient property markets in the country — posting double-digit growth through 2024 and still tracking well ahead of the national average in 2025. That resilience is structural: WA's population is growing faster than any other state, vacancy rates are sitting at roughly 0.5%, and housing completions have consistently lagged well behind demand.
But the next few weeks matter.
A third rate hike in 2026 will reduce borrowing capacity — by roughly $25,000 per 0.25% increase for the average buyer. That doesn't kill the Perth market, but it shifts it. We're already seeing a split between affordable entry-level stock (still running hot) and the mid-to-upper tier (beginning to feel the pinch). That dynamic will deepen.
On the Budget side, any changes to negative gearing or the capital gains tax discount will add uncertainty for investors — and investor confidence is one of the levers keeping rental supply as tight as it is. If investors pull back, rents tighten further. That's not great for tenants, but it does keep investor-grade stock in demand.
The more immediate budget impact? If cost-of-living relief measures are inflationary, the RBA won't be done hiking. ANZ is already forecasting rates could go higher — and Westpac sees two more rises after May.