Perth Overtakes Melbourne for the First Time in a Decade
After a strong run, Perth has now officially overtaken Melbourne’s median house price for the first time in over 10 years.
Since the pandemic, Melbourne’s property market has underperformed, while Perth has surged, driven by:
- Affordable housing
- Limited housing supply
- Population growth
- Strong investor activity
Melbourne Edges Ahead in May, But Perth Dominates the Annual View
According to the PropTrack Home Price Index for May:
- Melbourne posted a 0.79% price increase, beating Perth for the month
- However, over the past year, Melbourne’s median house price has fallen by 0.38%
- In contrast, Perth’s median has surged by 8.4%
Since March 2020 (the start of the COVID period):
- Melbourne’s house prices rose by 17.6%
- Perth’s house prices rocketed by 86.7%, taking the lead
Current Median House Prices
- Perth: $787,000
- Melbourne: $782,000 (still 2.85% below its 2022 peak)
“Perth has recorded persistently strong home price growth, consistently ranking as the strongest market for price growth nationwide.”
— Eleonor Creagh, Senior Economist at PropTrack (via Broker News)
Investor Interest Driving Perth's Surge
Property investors are flocking to Perth for several key reasons:
- Ultra-tight rental market
- Record-low vacancy rates
- Soaring rents
In 2021, Perth’s median house price was 40% lower than Melbourne’s. Now, it’s higher—a dramatic shift in just a few years.
Melbourne’s Turn to Rebound?
While Perth has been dominant, Melbourne is showing new signs of life.
- The strongest monthly growth of any capital city in May
- Growing buyer confidence, thanks to recent interest rate cuts
Are the Markets Converging?
“Price growth across the capitals is starting to converge,” said Ms Creagh.
She noted:
- Melbourne’s price growth is now picking up
- Perth and Brisbane are starting to moderate after long runs of outperformance
- Recent interest rate cuts are improving buyer sentiment across all capitals
“The growth seen in all capital cities is underpinned by improved buyer sentiment and renewed confidence following interest rate cuts.”
