Property Market in Perth: 2024 in Review
The Perth property market in 2024 was anything but predictable. House prices went through the roof, demand surged, and rental reforms changed the game for renters, buyers and investors.
Population growth and new laws set the scene, but it was the rental market that was the story of the year. Competition for a limited number of properties was fierce and as rents went up, many were left scrambling for options.
On the sales side, increased listings and steady price growth were the silver lining for those who navigated the market with strategy and patience.
Here’s the wrap for 2024.
Perth Property Market Overview
Perth’s property market has experienced significant growth over the last couple of years, surging by 76% since March 2020.
Despite this boom, Perth’s median home value of $751,000 (as of August 2024) remains relatively cheap compared to the $861,000 median across other capitals. This means that there is headroom for prices to continue to increase as demand continues to grow.
The future of Perth’s property market remains promising. Tim Reardon, Chief Economist at the Housing Industry Association, predicts that the current boom could continue for at least 5-10 years, potentially marking the end of Perth’s historical boom-bust cycle.
Strong population growth, driven by internal and external migration, has created sustained demand, while housing supply remains insufficient. Reardon suggests that this will likely lead to a pattern of steady price increases, interrupted only by brief stabilisation periods.
A significant factor driving this growth is the imbalance between supply and demand. Western Australia’s population grew by 93,800 people, but housing completions lagged far behind at just 17,500.
However, Perth’s heavy reliance on the resources sector introduces notable risks. The market is vulnerable to fluctuations in commodity prices, which have recently declined, alongside falling mining profitability and wages.
Historically, such downturns have had major impacts on Perth’s housing market, as evidenced by the 18% nominal decline in dwelling values during the commodity downturn from 2014 to 2019.
While Perth’s relative affordability and strong demand present opportunities, the reliance on the volatile mining industry introduces a higher risk to property market investments.
Perth Rental Market in Focus
If there’s one story that defined Perth’s property market in 2024, it’s the rental market. With demand far outstripping supply and record-low vacancy rates, Perth became one of Australia’s tightest and most lucrative rental markets.
Demand Outstrips Supply
The rental market remained under immense pressure as migration, particularly from overseas, fuelled demand.
Perth’s vacancy rate hovered at an exceptionally low 0.6% as of September 2024, among the lowest in Australia, leaving tenants scrambling for available properties.
The result? Extremely fierce competition, with many renters paying premiums, compromising on locations or locking in longer leases just to secure housing. Suburbs like Joondalup, Victoria Park, and Cannington experienced heightened demand due to their proximity to employment hubs, schools, and transport links.
Rising Rents and Tenant Challenges
Rents skyrocketed throughout the year, with house rents increasing by 12.6% and unit rents by 11.7% over the 12 months to September 2024. For many tenants, affordability became a pressing concern, pushing some to downsize or move further from the CBD.
Despite rising costs, Perth’s rental yields averaged a healthy 4.2% in September 2024, making it an attractive city for property investors. However, these rental hikes added significant strain on tenants, particularly those already dealing with cost-of-living pressures.
Opportunities for Landlords
For landlords, Perth’s rental market in 2024 was ripe with opportunity.
Sustained tenant demand, combined with the ability to achieve higher rents, improved investor confidence. Affordable suburbs offered attractive entry points and the potential for strong rental yields.
Legislative Impacts: WA Rental Reforms
The WA government introduced significant rental reforms in 2024, including limiting rent increases to once per year and simplifying dispute resolution processes. These changes were further expanded with Phase 2 of the Residential Tenancies Amendment Act 2024, which came into effect in the second half of the year.
Phase 2 introduced allowances for pets and minor modifications to rental properties, along with a new determination process managed by the Commissioner for Consumer Protection.
The updated laws aim to balance tenant rights with landlord concerns, but implementation has highlighted challenges. Most applications to the Commissioner have been from landlords seeking to refuse tenant requests to keep a pet.
Common reasons cited for refusal include potential property damage or undue hardship to the owner. However, Consumer Protection has clarified that general claims—such as asserting that a pet will cause damage—are insufficient without evidence.
Property owners need to provide specific proof, such as documentation of the property’s current condition or tangible costs associated with potential damage, to justify refusals.
Similarly, requests for minor modifications, such as installing shelves or adding garden features, have generated fewer submissions. However, most applications in this category were unnecessary, as they related to modifications not covered under the minor modifications list. For such cases, different processes apply, and submissions to the Commissioner are not required.
The determination process requires landlords to notify tenants of their intent to apply to the Commissioner and submit their application within 14 days of receiving the tenant’s request. If this timeframe is missed, the tenant’s request is automatically approved.
The reforms emphasise the need for collaboration between tenants and property owners, with Consumer Protection encouraging up-front discussions through property managers to avoid disputes and streamline outcomes. While tenants have welcomed the added rights, some landlords have responded by raising rents, refusing a lease renewal or tightening lease conditions to offset the perceived risks and compliance costs introduced by these changes.
Sales Market Highlights: A Year of Growth and Resilience
The sales market in Perth made headlines throughout 2024 as demand remained strong despite economic headwinds and rising interest rates.
Increasing Median Prices
With median prices getting higher, first-home buyers continued to face challenges due to rising property prices, despite government incentives aimed at supporting their entry into the market.
Investors, however, saw strong opportunities in Perth, with attractive rental yields and the city’s long-term growth potential driving interest.
A Surge in Listings
Perth experienced a notable surge in property listings, reaching a three-year high in 2024. While this provided temporary relief for buyers, the increased stock was quickly absorbed. As a result, homeowners started to capitalise on the higher price points and investors cashed in on capital gains.
Suburbs such as Scarborough, Fremantle, and Cottesloe remained popular among high-income buyers, while areas like Baldivis and Ellenbrook continued to attract first-home buyers and young families seeking more affordable options.
With strong fundamentals and increasing interstate and international migration, Perth’s sales market is expected to maintain its momentum well into 2025. However, affordability concerns and potential economic shifts could temper the pace of growth in the coming year.
Suburbs That Stood Out in 2024
Perth’s suburbs played a role in shaping the city’s property narrative in 2024, each offering unique appeals to different segments of the market. From affordable housing options to luxurious coastal homes, these suburbs captured the attention of buyers and renters alike.
High-Demand Suburbs for Renters
Areas such as Victoria Park, Joondalup, and Cannington saw high levels of rental activity in 2024. They are prized for their accessibility to the CBD, public transport, and local amenities like schools and shopping centres. As the rental market tightened, they became hotspots for young professionals and families seeking well-connected and affordable housing options.
Coastal suburbs like Scarborough and Hillarys also stood out for their lifestyle appeal, with proximity to the beach driving demand despite higher rental prices. They were particularly popular among expats and interstate migrants who value Perth’s renowned outdoor lifestyle.
Sales Market Star Performers
On the sales side, Fremantle, Cottesloe, and Applecross attracted high-income buyers seeking premium properties. Fremantle’s blend of heritage charm and modern amenities made it a standout, while Cottesloe and Applecross continued to appeal to those looking for waterfront properties.
For first-home buyers, Baldivis and Ellenbrook were the go-to suburbs, offering more affordable entry points into the property market. The region provided growing families with access to new infrastructure, schools, and green spaces.
Emerging suburbs such as Alkimos and Byford showed promise too.
Looking Ahead: Predictions for 2025
As 2024 concludes, Perth’s property market remains a focal point for investors, buyers, and renters.
Continued Growth in Median Prices
Perth’s property market is expected to continue its upward trend, albeit at a slower pace.
Median house prices are projected to reach between $840,000 and $856,000 by the end of 2025, reflecting a rise of approximately 5.2%, according to KPMG Australia.
While this growth is more moderate than the double-digit gains of 2024, it highlights Perth’s resilience compared to other capital cities, like Sydney and Melbourne, which are seeing more pronounced slowdowns.
Suburbs such as Cottesloe and Dalkeith are expected to retain their appeal for high-income buyers, while areas like Byford and Alkimos will likely draw increased interest from first-home buyers and young families due to relative affordability and ongoing infrastructure developments. Unit prices will also continue to grow, with projections suggesting an 8% increase by year-end.
Challenges in the Rental Market
The rental market in Perth is expected to remain tight, although signs of easing supply are beginning to emerge. Vacancy rates, which hit historic lows in 2024, are projected to hover around 1.4% — 1.5% in 2025, reflecting gradual improvement but still far from a balanced market.
Rental prices, which saw strong growth in 2024, may begin to stabilise as new housing stock becomes available. Median weekly rents for houses and units are expected to plateau or grow at a slower pace. However, affordability concerns will persist, pushing some renters toward shared housing or suburban areas further from the city centre.
Infrastructure and Urban Growth
Upgrades to public transport, road networks, and community amenities will improve the appeal of emerging suburbs, creating opportunities for buyers and investors willing to explore less saturated markets.
Additionally, the developments will alleviate some pressure on established suburbs, helping to distribute population growth more evenly across the metro area.
Economic Uncertainty and Interest Rates
There is potential for stabilisation of interest rates or even cuts if inflation eases. Such a scenario would reduce mortgage pressures, boosting buyer confidence and activity. On the other hand, economic uncertainty tied to global and domestic factors—such as commodity price volatility—could temper growth.
Perth’s property market remains a mix of opportunities and challenges. Continued population growth, high demand, and limited supply will underpin price increases, but the pace of growth is expected to slow as the market self-corrects. Rental pressures will remain a significant issue, even as vacancy rates improve slightly.
In 2025, Perth is set to build on its momentum as a competitive and attractive property market, but stakeholders must navigate affordability concerns and supply constraints to maintain balanced growth.
Final Thoughts
2024 was a year of toughing it out and making the most of it in Perth’s property market. Economic pressures and cost increases tested the market, but Perth’s appeal remained strong, and renters, buyers, and investors kept coming.
For renters, it was a year of competition, with vacancy rates remaining historically low, and many had to navigate tight supply and rising rents. For buyers, it was a year of rising prices and limited stock, so you had to be determined and strategic to find the right opportunities.
While other capitals were stretching the affordability boundaries, Perth had a lifestyle and potential that was unmatched. Fremantle and Scarborough remained popular, and Byford emerged as the new favourites for families looking to put down roots.
Looking ahead, Perth’s future depends on addressing the big issues—more housing supply, affordability, and balancing development with community needs will be the key drivers. As we head into 2025, the stage is set for Perth to keep evolving, and for those ready to take on its market, there are opportunities to be seized.
Perth in 2024 was more than just a market; it was the city’s proof of concept. As the year ends, it’s clear the story is far from finished.
Get a free rental appraisal now to prep yourself for success in Perth’s property market in 2025!
