Over the five years since the onset of the COVID-19 pandemic, the Perth real estate market has evolved from relative stability into one of the tightest supply environments among Australia’s capital cities. This trend extended into the City of Kalamunda and its surrounding suburbs where what was once a hidden corridor is now increasingly drawing buyers seeking lifestyle and space. With hindsight, it was obvious that the median house price in our area was undervalued for an extended period and abruptly corrected itself during the ‘lifestyle reflection’ phase of the Covid lockdowns.
Supply Shortages and Lack of Listings
One of the defining characteristics of the post-COVID period has been an acute shortage of listings. Across Perth, active property listings have fallen to record lows, consistently 60-80 per cent below long-term averages, creating intense competition amongst buyers.
In the City of Kalamunda, this trend is particularly pronounced because local stock tends to be tightly held by long-term owner-occupiers. This has been exacerbated by a “seller logjam” where homeowners delay listing because it is difficult to secure a replacement property in such a tight market. In short, first home buyers can’t get into the market, upgraders struggle to find the forever home & baby boomers continue to look for an adequate downsizer. We are grid-locked!
Value Growth Drivers
This limited supply has been the critical driver of value growth where scarce listings and strong buyer interest pushes prices upward as buyers compete for limited stock. For our area, the mix of lifestyle appeal, improved transport links and proximity to employment and the airport has sustained strong buyer demand. Recent government measures, such as expanded first home buyer guarantees with low deposit requirements has fallen flat and largely influenced demand in an already tight market, rather than opening supply. Additionally, domestic and international immigration continues to add fuel to an already combustible property market that simply can’t meet the demand.
New Housing and Construction Constraints
Despite strong demand, new housing supply has struggled to keep pace. Post-pandemic disruptions in construction, including labour shortages, supply chain delays and elevated materials costs, have dampened the delivery of new dwellings across Western Australia. While building approvals have improved in some years, completions remain below the levels required to match population growth with consistent year on year numbers falling short by tens of thousands. In Kalamunda’s established suburbs, opportunities for large scale greenfield development are constrained by terrain and infrastructure costs, while the much more accessible smaller mum & dad in-fill projects are hampered by shortsighted local government red tape and unnecessary restrictions which increase the costs and dampen enthusiasm.
Outlook for 2026
All of this points to the City of Kalamunda’s suburbs remaining a seller’s market in 2026. Prices will likely continue upward, driven by persistent undersupply and sustained demand, though growth may be somewhat subdued compared to the frenzy of the past few years. Unless there is a significant uptick in housing completions or policy interventions that effectively unlocks new supply, affordability pressures will persist and values will remain resilient.
