Why Perth Homeowners Are Choosing to Improve Rather Than Move
In recent years, Perth’s property market has evolved into one of Australia’s most tightly held and competitive environments. Low supply and strong demand are creating a market where homes are selling quickly and prices continue to show resilience. In this environment, more Perth families are asking a strategic question:
“Is it wiser to renovate my existing home rather than move in a tight market?”
For many, the answer is yes and there are several compelling reasons why renovating or extending is a smart way to add space, improve functionality and capture value without the disruption and cost of moving.
Perth’s Property Market: Tight Supply, Strong Demand
Perth’s property market remains one of the most competitive in Australia. As of late 2025 and into 2026, listings are well below historical averages, with advertised stock reported to be around 45 % lower than the five-year average, creating scarcity and upward pressure on prices. Median home values continue to rise, with consistent quarterly and annual gains reflecting ongoing demand.
When supply is limited, buyers have fewer options, competition increases and sellers hold stronger leverage. This dynamic pushes prices higher and for homeowners who are already in a valued location, extending or improving their current property becomes an appealing alternative to up-rooting and entering the same competitive market with limited stock.
Renovating vs Moving in a Tight Market
In a market defined by limited supply and steady demand, homeowners considering an upgrade often find themselves competing for a small pool of suitable properties. When quality homes become available, competition can drive prices upward.
For many families, the question becomes less about availability and more about financial strategy.
When assessing a move, it’s important to account for the full picture:
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Real estate agent fees
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Marketing and campaign costs
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Stamp duty on your next purchase
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Legal and settlement costs
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Removalist expenses
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Purchasing into a rising market
These transaction costs can represent a substantial outlay – capital that does not improve the underlying asset itself.
By contrast, extending or adding a second storey allows you to invest directly into your existing property. Rather than paying to transact, you’re investing in additional space, improved functionality and long-term value.
In established Perth suburbs where land value forms a significant component of overall property value, retaining your existing block while enhancing the built form can be a highly strategic move.
Interest Rates and Market Conditions
Interest rates continue to influence housing affordability and borrowing capacity across Australia. While movements in the official cash rate can impact purchasing power, Perth’s tight housing supply and population growth have continued to support price resilience.
In practical terms, upgrading by moving often means taking on a larger mortgage in a higher-priced environment.
Renovating, on the other hand, allows many homeowners to:
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Improve their living space without entering a competitive buying cycle
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Maintain their existing location and community
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Structure borrowing around a defined construction cost
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Add value within a market that continues to show underlying strength
For homeowners who are equity-rich but space-poor, extending can represent a more controlled and considered pathway forward.
Long-Term Positioning in Perth’s Property Market
Market analysts continue to forecast steady demand across Perth, underpinned by population growth, constrained supply and relative affordability compared to eastern states.
In such an environment, improving a well-located property can support both lifestyle outcomes and long-term capital positioning.
A thoughtfully designed extension or second storey addition can:
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Increase liveability
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Enhance architectural cohesion
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Improve resale appeal
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Strengthen the overall value proposition of your home
Rather than adapting to what the market offers, you create a home that aligns precisely with your needs, while retaining the long-term benefits of your existing landholding.
Long-Term Value and Asset Growth
Perth’s residential market is forecast to continue demonstrating strength over the coming years, with analysts suggesting moderate but consistent growth as demand remains strong and supply tight. Some forecasts see annual value increases continuing into 2026 and beyond, driven by population growth, employment strength and undersupply that is yet to be fully addressed.
In this context, renovating your property can complement the market’s underlying capital growth. Instead of chasing a limited pool of available homes, many homeowners find they can unlock value and support long-term wealth creation by improving what they already own.
Benefits of Renovating in a Tight Market – At a Glance
✔ Achieve Your Ideal Home Without Moving
Renovations allow you to stay in your community, keep schools and routines stable, and design your home for your lifestyle.
✔ Avoid Transaction Costs
Selling and buying can incur agent fees, stamp duty and relocation costs – costs that renovating avoids.
✔ Improve Value in a Growing Market
Well-designed renovations often increase a property’s appeal and long-term value.
✔ Manage Borrowing in a Higher-Cost Environment
Where borrowing capacity is influenced by interest rates, renovating can be a more manageable way to invest in your home without entering a higher-priced purchase.
✔ Respond to Tight Supply
With limited listings and strong demand, renovating provides an alternative path to growth and family space without battling fierce competition for scarce properties.
Start with Budget Clarity
If you’re considering whether to renovate in Perth’s tight real estate market, the first step is understanding potential investment. Tools like the Addstyle Renovation Budget Indicator help you explore likely cost ranges early in your planning, so you can make informed decisions before design or surface finishes are locked in.
👉 Explore the Renovation Budget Indicator
Final Thoughts
Perth’s real estate market is dynamic, competitive and underpinned by strong fundamentals. In such an environment, renovating your existing home – whether through a ground floor extension, a second storey addition or cosmetics upgrades – offers a way to shape your living space, capture value and avoid the high costs and uncertainty tied to buying elsewhere.
If you’re weighing your options, a thoughtful renovation strategy guided by realistic budgets and clear goals can be a highly effective way to achieve more space, comfort and long-term property value
