Perth Property Market Predictions 2025

Towards the end of the year, we look with anticipation and excitement to 2025. We also look back to 2024 when Perth proved a strong leader among capital cities, attributed to its median value increases for both houses and units alike. In like manner, it appears that momentum will remain strong this year.

This article will lay forth the Perth property market predictions for 2025 so that you can adopt a proactive, informed approach to property investment.

Overview of Perth Property Prices

Throughout 2024, the Perth housing market saw impressive growth. The median price increased by 24.7% for houses and 24.5% for units, owing to the strong market conditions. The supply remained relatively low, which put upward pressure on home values and drove the price growth.

However, on the rental side, REIWA President Joe White says, “Rent prices are recording periods of stability, dwellings are taking slightly longer to rent and rental listings are increasing.” Accordingly, it seems that supply and demand are in the process of becoming more balanced.

In line with that, Westpac experts forecast that the annual price growth will ease in 2025 to 4% (compared to the expected 6% for 2024 and the recorded 10% for 2023). This slowdown is more prominent in Sydney and Melbourne, whereas Perth and Brisbane maintain their double-digit price growth.

Below are the projections for Median dwelling price in 2025:

Perth Median House Price Predictions 2025

By looking at the expected values for unit and house prices in the Perth market, it is possible to determine the extent to which investors can expand their investment portfolio based on their means.

The Growth in Perth House Prices

According to KPMG Australia, Perth is expected to bring in the strongest house price growth by the end of 2024. It foreshadows that the increase in house prices will reach 10.2% by December 2024 and decrease to 5.2% by December 2025. This downturn in the increase percentage aligns with the balance in Perth’s housing market referenced earlier.

Although Perth’s 10.2% is the highest projected percentage for house price change, its 5.2% in 2025 places it in second-last place (before Brisbane’s 5.1%).

Median House Prices

Based on the trajectory of Perth house prices, Perth’s median for houses is expected to range anywhere between $840,000 to $856,000 by the end of 2025, which is no less than an extra $140,000 from the $697,000 Perth property prices recorded in August of 2024. That is to say that house prices will probably be rising strongly (until more properties are built).

The Growth in Perth Unit Prices

Unit prices are likely to rise; however, the change rate is much more promising and encouraging to potential investors than houses.

Based on data by KPMG Australia, the median unit price change rate at the end of 2024 is expected to be 8.6%, and it is projected to slow down to a percentage of 8.0% by the end of 2025—a slight difference.

Median Unit Prices

For units, the expected range for property values by the end of 2025 is $443,000 to $447,000. However, the median unit house price recorded in August 2024 has already reached $461,000, and it does not seem to be stopping anytime soon, with strong rental yields providing compelling buying for investors.

Perth Rental Market Predictions 2025

Understanding the performance of rental properties compared to other capital cities helps make informed property investment decisions. Below are the current and projected rental rates in the Perth property market:

Median Rental Prices

The supply issue, population growth, and other economic factors fuel the rental market growth.

By looking at Reiwa’s data on rental property prices, it is seen that the house median price was $650 per week over the 12 months ending in August of 2024, an increase from the $585 per week recorded in the past year. As for unit values, the median rent price has grown from $530 per week in 2023 to $600 in the 12 months ending in August 2024.

Thus, the growth is undeniable and almost the same for both houses and units. Nonetheless, the rate of growth is slightly easing, as new supply is provided, the market reaches an affordability ceiling, and properties take longer to rent.

This self-moderating process is expected to persist throughout 2025. Although seen across most capital cities, this Perth property trend is thankfully more contained in Perth.

Vacancy Rates

Vacancy rates reached an all-time low of 0.4% in March of 2024, then rose to 0.5% in April, and has now doubled since July, to 1.4% in September.

This is the first time since June 2022 that the vacancy rate has been above 1%, it reflects the slow easing of the rental market and its projected upturn. Mr. White says, “We are still a long way from a balanced market, but the numbers are encouraging.”

Why Is the Perth Property Market Continuing to Grow?

By understanding the ‘why’ behind the continuous growth in Perth and Western Australia, you can draw your conclusions and adjust your investment strategy accordingly. Here are the most relevant factors:

Strong Population Growth

Population growth due to migration to major cities in WA (like Perth) is high, including couples and singles, seeking individual properties for smaller households, which partially explains the high demand for accommodation and the housing crisis.

PropTrack economic researcher Cameron Kusher says, “You’ve got fewer people leaving Western Australia for other states and territories, but you’ve also got more people coming into Western Australia from other states and territories. Obviously, that drives demand for housing, too.” Nonetheless, that population surge may be restricted by the tightening of visa criteria.

Limited Housing Stock

Constraints in the building industry result in short supply, which increases demand for already established homes, further expanding growth.

According to Domain’s chief of research and economics Nicola Powell, “Home building has also struggled to keep up with population growth due to the scarcity of land, weak building approvals, and high construction costs exacerbating the existing structural undersupply.”

Speaking of costs, Mr. Kusher remarks that interest rates are the highest they have been in 12 years, hindering the establishment of new housing.

Heightened Borrowing Power

With a higher borrowing power, more home buyers are investing. Investors are responsible for 36.6% of loans for the construction of dwellings in the 12 months to May 2024, 13.8% higher than it was a year before.

Not to mention, the Stage 3 tax cuts effective since July will only boost borrowing capacity and buying power along with it. Powell elaborates, “It could provide that extra borrowing capacity to bring more buyers to the market, speeding up their homeownership journey and further driving up Australia’s home prices.”

The Value of Getting a Property Rental Appraisal in 2025

The current affordability ceiling has caused a fall in demand for housing over the median rent price, which makes overcharging more detrimental than ever. Between that and maximising profit, determining the appropriate rent value can become a balancing act.

Getting a professional appraisal is the way to face it and navigate the ever-evolving real estate market in Perth. It includes rent calculations, a rental appraisal report, and property, target market, and location analysis.

Get a Free Rental Appraisal Instantly With No Obligation

It all starts with a property appraisal, and there is nothing to lose because it involves zero obligations. With our help, you can define your property goals, devise a strategy, and make 2025 the year you transform your investment portfolio!

Contact us now to arrange an appointment for your free rental appraisal!