Perth Property Market Forecast 2025
Is Growth Sustainable?
The Perth property market forecast for 2025 comes after a strong period of growth. It has done better than all other Australian capital cities in recent years. But as we move into 2025, will this trend continue, or is the market reaching its peak?
Over the past 4 years, the Perth property market has been the standout performer across the Australia with growth in the past 12 months alone of around 25% which was above all other capital cities. Price growth over the past 4 years has exceeded 70%. This market growth has been largely underpinned by the investor market.
Expert Market Analysis
Watch as Property Market Expert Dominic Cavagnino from Binnari Property, breaks down the Perth property market forecast for 2025, including recent market performance, investor activity, and future growth potential in Western Australia’s capital city.
Perth’s Property Boom
CoreLogic reports that house prices in Perth have risen by 70% in the last four years. This growth is much higher than in Sydney, Melbourne, and Brisbane. Several factors have contributed to this boom:
– Perth has a serious housing shortage. This lack of homes has caused house prices to rise. Demand is higher than the number of available properties.
– Interstate and overseas migration: the city’s relative affordability compared to the eastern states has attracted buyers and investors, contributing to strong population growth.
– Strong rental market: vacancy rates are at record lows, below 1%. This has pushed rental yields up to 5-6%. These yields are the highest among Australian capital cities.
– Mining industry boom: the strength of the resources sector has improved employment and economic stability, fuelling demand for housing.
– Infrastructure investments: ongoing transport and commercial developments are further increasing the appeal of key suburbs.
Rental Market & Vacancy Rates
One of the main factors driving the Perth property market in 2025 is its rental market. It is seeing record low vacancy rates.
– According to REIWA, Perth vacancy rates are under 1%, meaning rental properties are in extremely high demand.
– Rental yields of 5-6% are currently the highest among capital cities.
– Tight supply and high demand are keeping house rent prices high, making it an attractive market for investors.
– Increase in build-to-rent developments: new projects are emerging to cater to long term rental demand.
However, historical trends suggest this may not be sustainable:
– In previous market cycles, vacancy rates in Perth have exceeded 6%, significantly reducing investor returns.
– Government policies aimed at increasing housing supply could ease demand pressures, potentially stabilising rental yields.
Investment Risks and Considerations for 2025
While the Perth property market predictions 2025 remain optimistic, investors should be aware of potential risks:
Mining Sector Dependence
The Western Australian economy is heavily reliant on mining, which accounts for 45% of the state’s economic output. A downturn in mining exports due to US and China trade tensions could negatively impact the property market, as highlighted by WA Treasury.
Interest Rate Uncertainty
– If the RBA maintains higher interest rates for longer, affordability may decline, slowing the market.
– The impact of interest rate cuts later in the year could help reignite demand.
Over-investment in House-and-Land Packages
– Some eastern state investors are buying in outer suburban estates (30-40km from the CBD) without understanding local demand dynamics.
– Many of these estates lack infrastructure and owner-occupier demand, making long term capital growth uncertain.
Where Are the Best Areas to Invest in Perth?
For those looking to invest in the Perth property market 2025, targeting well connected, high demand areas is key.
Top Investment Suburbs for 2025:
– South Perth – Close to the CBD with easy road links, upcoming rail links, close proximity to great shopping.
– Scarborough – Beachside suburb with strong lifestyle appeal.
– Victoria Park – Gentrifying area with great public transport and rental demand.
– Joondalup – A major employment hub with continued population growth.
– Fremantle – Cultural hub with strong buyer and investor interest.
– Osborne Park & Innaloo – Emerging high yield areas with strong infrastructure improvements.
Areas to Avoid:
– Far outer suburbs (e.g. Ellenbrook, Baldivis) with oversupply risks.
– High density apartments in underperforming areas where rental demand is weak.
What's Next for Perth Property?
The Perth property market forecast 2025 suggests that while the city has experienced incredible growth, the next 12 months may bring stabilisation rather than continued exponential increases.
Key Takeaways:
– The rental market remains strong, but vacancy rates could rise as supply increases.
– Investors should focus on well located properties near infrastructure and employment hubs.
– Perth’s economy remains resource dependent, making it vulnerable to global economic shifts.
– Government incentives and tax reforms may further shape market conditions.
– Some top performers in the market will be suburbs with limited supply and growing demand.
With the right strategy, Perth remains one of Australia’s strongest property markets, particularly for investors seeking high rental yields and long term capital growth, however, caution should be taken with the dependance on the mining sector.
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Whether you’re buying in a median dwelling price range or an affordable suburb, deposit bonds can help make the process smoother.
Learn more about how deposit bonds can help you buy in Perth in 2025.
The content of this blog reflects the personal views of the author and is for information purposes only. It does not constitute financial, investment or professional advice. Readers should conduct their own research and consult a qualified financial or property adviser before making any decisions to invest in property. The author and the blog are not responsible for any actions taken based on the content.
