20,000 Perth homes now worth less than buyers paid, analyst says

Independent analyst Gavin Hegney has found that 20,000 Perth homes are now worth less than their owners paid for them, with about 13,000 of those owners in outright negative equity, The West Australian reported on 21 October 2026. Negative equity means the outstanding loan balance on a property exceeds what the property would currently sell for, leaving the owner unable to clear the debt from a sale alone.

Why it matters

For developers and agents reading the Perth market, a pocket of owners sitting below their purchase price changes how certain stock behaves when it comes back to market. A unit or house bought at or near a prior cycle peak and now valued lower is a forced-seller risk if the owner needs to move, refinance or is affected by a change in circumstances such as a rate reset or job loss. That matters for project feasibility and resale comparables in precincts where a chunk of existing stock was bought during an earlier price run, because those owners cannot discount to clear a sale without funding the shortfall themselves or negotiating with their lender. It also matters for valuers and lenders assessing loan-to-value ratios on refinance applications in the areas affected, since a cohort of underwater owners narrows the comparable sales a valuer can rely on without flagging downside risk.

Hegney’s analysis, as reported, does not single out individual developers or projects, and the figures are presented as a market-wide finding rather than an assessment tied to any specific site or builder.

The numbers

The two figures carrying the story are 20,000 homes now valued below what their owners paid, and about 13,000 owners in negative equity specifically, according to Hegney’s analysis as reported by The West Australian. The outlet’s reporting on the figures sits behind a subscriber paywall beyond the published headline and standfirst, so this report confines itself to what is independently verifiable from the outlet’s own published framing of Hegney’s work: the two headline counts and the attribution to Hegney as an independent analyst. No suburb-level breakdown, purchase-date range or percentage movement in values was available to verify beyond that published framing, so none is reported here.

What’s next

The practical test for the market is whether owners in the affected cohort are forced sellers over the coming months, since negative equity on its own does not trigger a sale, it only removes the option to exit cleanly if a sale becomes necessary. Developers and agents working in precincts where stock was bought near a prior peak have reason to track settlement and listing volumes closely, rather than relying on broad city-wide price indices, because a negative-equity pocket can sit well below the surface of an otherwise recovering market.

The negative-equity cohort also sits against a wider WA supply picture that remains stretched on the construction side. HIA WA says the Cook Government’s 4700 new skilled migration places fall short of the workforce the state needs to keep building, a shortfall that keeps upward pressure on build costs for new stock even while a slice of existing owners sit underwater on established homes. Further detail on which price bands, loan vintages or locations are most exposed to the negative-equity finding would sharpen the picture now available, and this desk will follow up if Hegney’s underlying analysis or further reporting makes that detail available.