2026 is off and racing!

The real estate market is alive and kicking with unit and villa stock outperforming houses as buyers race to lock in the last of the “cheap” properties close to Perth.

The listing count for the Perth metro area is hovering under 3,000 properties, a very long way from satisfying the demand for housing that exists in this supercycle of frenetic home buying activity.

We enjoy the lowest rate of unemployment and the fastest growing population of all the states, despite the high costs of living and serious housing capacity restraints.

Property values have jumped 19.5% in Perth over the 12 months to February 2026, and are predicted to continue to rise for the rest of 2026.

Meanwhile just to add a total curveball, the global economy has taken a leap into the chaotic world of war and energy supply shock.
We must reference the past to try and predict what comes next.

“There is no present or future – only the past, happening over and over again – now“. Eugene O’Neill

As we observe the current tensions surrounding the U.S. involvement in Iran and the subsequent blocking of the Strait of Hormuz, the parallels to the 1970’s are becoming increasingly difficult to ignore.
We are witnessing a historical cycle that mirrors the volatility of the 1973 Yom Kippur War and the subsequent OPEC oil crisis.

Just as the events of the ’70’s triggered a global shift, the current disruptions in this vital maritime chokepoint are creating significant inflationary pressures.

We are seeing these impacts move rapidly through the global economy.

* Initial Boom (1970–1974): Supported by a mining boom and credit expansion, house prices rose rapidly (sounds familiar!)

*The 1974 Crash & Stagflation: Following the 1973 oil shock, high inflation and rising interest rates (which hit 10%+) prompted a downturn.

*Real vs. Nominal Prices: While high inflation caused property to drop in real terms (adjusted for inflation) from 1974 peaks, nominal price falls were muted, and prices did not experience a widespread crash.

*Long-Term Impact: Property prices did not return to 1974 real levels until 1988, taking 14 years to recover in real terms.

Right now…

• Energy and Oil: Supply constraints are driving up costs at the source.
• The Global Supply Chain: The ongoing decoupling of global supply chains is acting as a major contributing factor to sustained market instability.
• Housing and Interest Rates: In Australia, these global pressures are translating into rising costs of living and, ultimately, upward pressure on interest rates.

Already here in Western Australia I am seeing contractors adding a fuel surcharge to their accounts in freight, waste, construction and other industries.
Agriculture and mining are generally global price takers, but their cost base is going up as we speak.

We will see the cost of goods and services rise, with the inevitable increased inflation data driving the Reserve bank to increase interest rates, affecting mortgage holders across Australia.

Understanding these historical precedents is essential for navigating the economic landscape we face today, both globally and at home.

Yes money will get more expensive but buyer activity will change creating new opportunity for astute individuals.

The big unknown in WA is how can we possibly match supply of houses to our growing population?

2026 may be the end of a super growth cycle (or not?).

An interesting year ahead.

Derek Baston
M: 0417 99 23 24
E: sales@bastonandco.com