The Perth property market has entered 2025 on a high note, bolstered by significant population growth, strong economic fundamentals, and a tight housing supply. For investors seeking affordability, value, and stable returns, Perth presents an appealing opportunity. Let’s explore the key drivers behind the market’s performance, recap its journey to 2025, and assess the outlook for property investment this year.
The Journey to 2025: Resilience Amid Change
In recent years, Perth’s property market has experienced steady growth, underpinned by Western Australia’s economic strength. The post-pandemic mining boom fuelled resource exports, stabilising the local economy and supporting wage growth. Despite national interest rate hikes, Perth property prices have remained relatively resilient due to their affordability compared to eastern capital cities like Sydney and Melbourne.
Population growth has been a significant contributor to demand. In 2023 and 2024, Perth became Australia’s fastest-growing capital city, welcoming hundreds of new arrivals daily. Net overseas migration and interstate movement, drawn by employment opportunities and lifestyle appeal, have significantly bolstered the housing market.
However, limited housing stock has created upward pressure on property prices and rents. This constraint, coupled with stable rental yields and growing buyer demand, continues to attract attention from investors.
Key Trends Shaping Perth’s Property Market in 2025
1. Population Growth Driving Demand
Perth’s population surge is reshaping the city. Western Australia recorded a 2.8% growth in the year to June 2024, surpassing 3 million residents in October. WA’s thriving economy and lifestyle advantages remain strong drawcards for migrants and interstate movers.
This rapid growth is straining housing supply, with new builds struggling to keep pace with demand. Investors can capitalise on this dynamic, particularly in emerging suburbs where infrastructure and amenities are expanding to accommodate the population boom.
2. Limited Housing Stock
The imbalance between supply and demand continues to dominate the Perth market. The availability of established homes remains tight, and elevated construction costs are slowing the rollout of new housing. For investors, this scarcity is contributing to rising property values and maintaining low rental vacancy rates, ideal conditions for capital growth and stable rental yields.
3. Stable Rental Returns
Perth’s rental market has shown remarkable resilience, with rental yields outperforming most eastern states. In December 2024, Perth’s median rental yield stood at 4.2%, compared to 3% in Sydney (CoreLogic). Low vacancy rates and increasing demand from new arrivals suggest this trend will persist into 2025, providing a reliable income stream for investors.
4. Economic Stability and Job Growth
Western Australia’s economy remains robust, fuelled by its resources sector, agriculture, and emerging industries like renewable energy. Unemployment levels in Perth are among the lowest in the nation, providing a strong foundation for long-term property market stability.
Economic growth is also spurring infrastructure development, with key projects like METRONET expanding public transport links and creating development opportunities around new transit hubs.
5. Affordability and Value
Compared to Sydney and Melbourne, Perth continues to offer exceptional value for money. The median house price in Perth was $745,000 at the end of December 2024 (REIWA)—less than half of Sydney’s median price of $1.3 million. This affordability, combined with strong growth potential, makes Perth an attractive option for investors seeking to diversify their portfolios without overextending financially.
The Outlook for 2025
As we progress through 2025, several market fundamentals point to a bright outlook for Perth property investment:
- Continued population growth will drive demand for housing, particularly in family-friendly suburbs with access to schools, healthcare, and transport links.
- Projects like METRONET and improvements to roads, ports, and community amenities will enhance Perth’s livability and boost property values in key areas.
- Investors can expect steady returns due to limited rental stock and rising rents.
- Western Australia’s economic strength will underpin confidence in the market, ensuring long-term stability for investors.
Perth’s property prices are forecasted to grow by up to 10% in 2025 (REIWA), and the year is expected to bring stability in rental prices and a more balanced market. However, challenges such as limited land availability and construction bottlenecks may temper the pace of new housing supply, keeping competition for properties high. Other considerations include the outcomes of state and federal elections and interest rate movements.
Why Investors Should Consider Perth
Perth offers a compelling proposition for investors in Sydney, Melbourne, and Brisbane seeking to diversify their portfolios. Key advantages include:
- Affordability: A relatively low entry point makes Perth accessible for both seasoned and first-time investors.
- High Growth Potential: Population growth and infrastructure projects will continue to fuel demand for housing.
- Strong Yields: Rental returns in Perth are among the best in Australia, offering a reliable income stream.
- Economic Resilience: A stable economy and low unemployment provide confidence for long-term investment.
As 2025 unfolds, Perth’s property market is positioned for continued growth, driven by population expansion, limited housing stock, and economic resilience. For investors, the city offers a rare combination of affordability, value, and opportunity.
By acting now, investors can secure a foothold in one of Australia’s most promising property markets and reap the rewards of Perth’s transformation into a major metropolis. With the right strategies, 2025 could mark the start of a prosperous chapter in Perth property investment.
Source
https://www.corelogic.com.au/news-research/news/2025/national-rental-market-has-well-and-truly-passed-the-peak-of-the-recent-rental-boom
https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/dec-2024
https://reiwa.com.au/the-wa-market/perth-metro/
https://reiwa.com.au/news/house-prices-to-grow-up-to-10-per-cent-in-2025-reiwa-market-forecast-update/
The information provided in this blog is for general informational purposes only and does not constitute financial, legal, or tax advice. While we strive to ensure accuracy, we make no guarantees regarding the completeness or reliability of the information. Readers should seek independent professional advice from a qualified financial, legal, or tax advisor before making any investment decisions. We accept no liability for any loss or damage arising from reliance on this content.
