Perth’s property market is poised for further growth in 2025, following a strong performance in 2024, according to REIWA’s latest market update. While the pace of growth is expected to moderate, both sales and rental markets are anticipated to remain active.
Sales Market: Moderate Growth on the Horizon:
2024 saw substantial gains in Perth property values:
- Median House Price Growth: 24.2%, rising from $600,000 to $745,000.
- Median Unit Price Growth: 21.4%, increasing from $412,000 to $500,000.
Looking ahead to 2025, REIWA forecasts continued growth in median house and unit sale prices, albeit at a more moderate pace of between 5% and 10%. Both house and unit median sale prices ended 2024 at record highs, with the median house price 36.7% higher than the previous peak in 2014 and the median unit price 11.1% higher than its 2014 peak.
Factors Influencing the Market:
Several factors could influence market activity in the first half of 2025:
- State and Federal Elections: Market activity may slow as buyers and sellers await election outcomes, particularly given housing is a key policy area.
- Interest Rates: Uncertainty surrounding interest rate movements may cause some market hesitancy. However, potential rate cuts could stimulate increased activity.
Despite talk of declining prices and buyer’s markets on the east coast, Perth’s market fundamentals remain strong, favoring sellers and supporting further price growth. These fundamentals include:
- Strong Population Growth: WA recorded 2.8% population growth in the year to June 2024.
- Low Unemployment and Strong Economy: Contributing to overall market strength.
- High Demand for Established Housing: Properties continue to sell quickly.
Affordability and Demand Trends:
Rising prices are likely to increase focus on affordability in 2025, driving demand for affordable suburbs and properties. Demand for units, typically a more affordable entry point, is also expected to remain strong.
Rental Market: Easing but Still Active:
Perth’s rental market eased in 2024 following previous strong growth. The vacancy rate rose from a record low of 0.4% in March to 1.9% by year-end due to:
- Adjustments to Demand: Renters sought cheaper or smaller properties, increased household occupancy, or returned to family homes.
- Increased Supply: Completed investor-owned new builds and tenants moving into new homes freed up existing supply.
Despite easing, rent prices still reached new records in 2024:
- Median Dwelling Rent: Peaked at $650 per week in April, remaining stable for the rest of the year (8.3% higher year-on-year).
- Median Weekly House Rent: Reached a record $670 by year-end (8.1% higher year-on-year).
- Median Weekly Unit Rent: Rose 14.0% over 2024 to $650 (8.3% higher than the September quarter).
Moderate rent price growth is expected in 2025, with periods of price stability likely. The vacancy rate is expected to continue its upward trend toward a more balanced market. Demand is anticipated to be highest for properties closer to the CBD, lifestyle hubs, and key transport infrastructure.
Regional WA Market Outlook:
Median house sale price growth will vary across regional WA, with southern centers like Bunbury, Albany, and Geraldton potentially seeing the strongest growth (10-15%). Broome, Busselton, and Esperance may experience 5-10% growth, while Kalgoorlie, Karratha, and Port Hedland are likely to see less growth (up to 5%).
Regional rental markets also showed signs of easing towards the end of 2024. Albany, Busselton, Esperance, and Geraldton are likely to see the most rent price growth in 2025, while stability or declines are possible in Karratha and Port Hedland.
Key Takeaway:
While the rapid growth of 2024 is expected to moderate, Perth’s property market remains healthy and is forecast for continued growth in 2025. Both sales and rental markets offer opportunities, but it’s essential to stay informed about local market conditions. Contact us for expert advice tailored to your specific needs.