Southwest Western Australia (SWWA) has experienced a 15–20% reduction in rainfall since the 1970s with severe reductions in inflows to Perth drinking water reservoirs. To quantify rainfall and runoff patterns, we used trend and change point analyses for a 50 year record (1950–2008) and in the last two decades (1989–2008). From 1950–2008, trend tests showed significant declines in annual rainfall and runoff with corresponding change points for both rainfall and flow in the late 1960s or mid‐1970s. In the more recent record (1989–2008), runoff declined in the majority of catchments, but rainfall did not show a significant downward trend. Rather, streamflow decline was observed as a step change in response to the occurrence of below‐average rainfall years. A shift from perennial to ephemeral streams and a decline in the runoff coefficient (runoff/rainfall) in the last decade suggests a new hydrologic regime has developed with important implications for future surface water supply.