The cost of building a new home in Perth has skyrocketed, with new data revealing a staggering 95.6% increase in construction costs since 2019. This means that what once cost $300,000 to build now requires a whopping $586,800, a trend that has pushed Perth into the national spotlight for the largest escalation of costs.
But here's where it gets controversial: the median price in a staggering 126 Perth suburbs has now surpassed the $1 million mark, leading to a record number of 'million-dollar club' suburbs in the state. Samson, east of Fremantle, has joined this exclusive club for the first time, with its median house sale price jumping an incredible 40.5% to $1.25 million. Other top performers include Brentwood, Serpentine, Roleystone, and Maylands, all experiencing significant annual growth.
And this is the part most people miss: Peppermint Grove, Perth's most expensive suburb, has retained its crown with a median house sale price of $5.1 million at the end of 2025, a 9% growth over the year. REIWA President Suzanne Brown attributes this to the Perth property market's strong performance, with a 13.3% rise in median house sale prices for Greater Perth in 2025, following a 25% growth in 2024 when a record 37 suburbs joined the million-dollar club.
However, not all suburbs are thriving. Six suburbs have fallen from the million-dollar club since the end of 2024, with Karawara, Carmel, and Bickley seeing their median house sale prices drop below $1 million by the end of 2025. Mariginiup, Hovea, and Millendon also dropped off the list due to a lack of qualifying sales in 2025.
So, what's driving these skyrocketing costs? According to Master Builders Australia Chief Economist Shane Garrett, the rising cost of building materials is a significant factor, with a 39.4% increase since 2019. Products like ceramic, cement, timber, and joinery have seen the largest price hikes. Master Builders Western Australia CEO Matt Moran believes that, with an already strained industry due to a worker shortage, these rising material costs will further hinder efforts to address the housing crisis.
"MBAWA is committed to collaborating with the State Government on practical policies to support the local industry in building affordable housing for our community," said Mr. Moran. He emphasized the need to focus on supply-side solutions, such as increasing the construction workforce and making more land available.
As we navigate these challenging times, it's essential to consider the impact of these rising costs on first-time home buyers and the overall property market. What are your thoughts on this situation? Do you think the government and industry leaders are taking the right steps to address these issues? We'd love to hear your opinions in the comments below!
