Welcome to our latest analysis of the Perth property market! Using data from the Real Estate Institute of Australia (REIA) for the December 2024 quarter, we delve into the key trends shaping our local market – from impressive price growth to evolving buyer behaviour and shifts in the rental landscape.

Sales Market: Perth Leads Growth, Especially in Units & Townhouses

Perth stood out nationally in the final quarter of 2024, particularly in the ‘other dwellings’ category (which includes units, townhouses, apartments, and terrace homes).

• Other Dwellings (2-Bedroom): The median sale price surged 3.9% over the quarter to reach $535,000. This represents a significant 24.4% increase compared to December 2023.
• Houses (3-Bedroom): Continued their upward trend, with the median price rising 2.8% in the quarter to $783,000. Annually, this is a 20.5% increase.

Growth Across Perth & Regional WA:

This strong performance wasn’t isolated. Property price growth was evident across different parts of Perth and key regional centres:

• Perth Houses (3-Bed, Dec Qtr): Inner (+1.9% to $1.62M), Middle (+4.8% to $915k), Outer (+1.4% to $730k). Annual growth was particularly strong in the Middle (21.2%) and Outer (20.5%) rings.
• Perth Other Dwellings (2-Bed, Dec Qtr): Inner (+1.8% to $575k), Middle (+4.8% to $545k), Outer (+3.2% to $480k). Annual growth was remarkable across all areas, exceeding 26% in the Middle and Outer rings.
• Regional Houses (3-Bed, Dec Qtr): Growth seen in Bunbury (+1.6%), Broome (+5.0%), and Albany (+8.8%). Annual growth was robust, led by Bunbury (+24.0%).
• Regional Other Dwellings (2-Bed, Dec Qtr): Mixed results quarterly (Bunbury up, Broome & Albany down), but strong annual growth across Bunbury (+23.1%), Broome (+5.1%), and Albany (+38.1%).

Beyond the Headlines: A Shift in Market Dynamics

While the numbers show strong growth, REIWA President Suzanne Brown noted a change in buyer behaviour towards the end of 2024.

• Easing FOMO: The intense “Fear Of Missing Out” seen earlier in the year subsided as more listings came onto the market, offering buyers greater choice.
• More Considered Purchases: Buyers began taking more time, leading to an increase in the median time properties spent on the market.
• Focus on Affordability: Buyers became more prudent, carefully considering what they could comfortably afford in terms of repayments.

Ms. Brown suggests this signals a shift towards more moderate price growth and slightly longer selling times compared to the peak frenzy of early-mid 2024. This makes professional presentation and accurate pricing crucial for sellers in the current environment.

Rental Market: Rents Rise, But Growth Rate Slows

Perth also led the nation in median rent increases for both houses and other dwellings during the December quarter and over the year.

• Median Rent (3-Bed House): Reached $650/week (up 3.2% quarterly, up 12.1% annually).
• Median Rent (2-Bed Other Dwelling): Reached $620/week (up 3.3% quarterly, up 12.7% annually).

Important Context – Easing Growth:

Crucially, while rents continued to rise, the rate of that growth slowed significantly compared to the previous year. Annual growth in December 2023 was much higher (17.2% for houses, 22.2% for other dwellings).

According to REIWA, this moderation is due to:

1. Demand Adjustments: Tenants forming larger households, choosing to buy, or returning to family homes.
2. Supply Increases: Completion of investor builds and tenants moving into their own newly built homes freed up some rental stock.

Vacancy Rate Improves:

Reflecting the changing supply/demand dynamic, Perth’s rental vacancy rate rose to 1.9% by the end of December 2024. This is up 0.3 percentage points from September and 1.2 percentage points higher than December 2023 – the biggest improvement nationally.

While this indicates better availability overall, REIWA cautions that conditions vary significantly by suburb. Some areas remain very tight, while others with new supply may see vacancies take longer to fill.

Rental Trends Across WA:

• Perth Rents (Dec Qtr): Increases in Inner/Middle rings for houses & other dwellings; stable in Outer rings. Regional rents saw increases in Broome/Albany houses but stability/declines elsewhere.
• Annual Rent Growth: Generally positive across Perth metro areas for both property types. Regional results were more varied, with strong growth in Albany houses but declines in Broome/Albany other dwellings.

Key Takeaways & Looking Ahead

The end of 2024 painted a picture of a Perth property market characterised by:

1. Strong Price Appreciation: Particularly for units, townhouses, and apartments, though house prices also saw solid gains.
2. Shifting Buyer Sentiment: A move away from intense FOMO towards more considered, affordability-focused purchasing.
3. Moderating Rent Growth: While rents are still rising, the pace has slowed significantly from the previous year.
4. Improving Rental Availability: The vacancy rate has climbed, offering slightly more breathing room for tenants, although conditions vary locally.

Navigating the Perth Market in 2025?

Understanding these trends is vital whether you’re buying, selling, investing, or renting. The property market is transitioning, and expert advice is more valuable than ever.

Contact Holdsworth Real Estate today! Our experienced local team can provide tailored insights and help you achieve your property goals in the current market.