Perth property market likely immune from any economic spluttering

The Perth property market has knocked the lights out in recent years — and a combination of tight supply, strong migration and relative affordability means the party’s not over yet, experts say.

Since 2020 Perth dwelling prices have soared by more than 75 per cent — more than any other capital — and the fundamentals point to continued growth, albeit at a slower pace. 

“Perth is still experiencing the highest amount of migration in the country,” says Scott Townsend, Director, Perth Property Buyers. 

“We are still very affordable in comparison to the average wage versus the other major capitals.” 

According to CoreLogic, Perth dwelling values surged 14.3 per cent over the past year, delivering a nation-leading 75.9 per cent growth over the past five years.

 Yet prices remain at the lower end of the scale nationally.

The median price of a Perth home is now $807,933, below Brisbane ($894,425), Canberra ($846,955), Adelaide ($822,201) and Sydney — where the median dwelling costs $1.186 million.

The only capitals with lower median dwelling values were Darwin ($506,591), Hobart ($661,544) and Melbourne ($772,561).

According to CoreLogic, the combined capital city median dwelling value is now $815,912. 

David Hall of Buyers Agency Co said this year would “not see the madness of 2024”, but house prices in some areas could still see growth of up to 15 per cent.

“I am picking houses — not land, apartments or units — to do 10 to 15 per cent, dependent upon location,” he told Australian Property Investor Magazine.

That growth would be driven by affordability, strong migration and low stock levels.

“Depending on whose numbers you trust, we are forecast to have 72,000 to 80,000 migrants arriving in Perth this calendar year,” Mr Hall said.

“At 2.25 people per household, this equates to 35,500 new dwellings required.”

Yet just 16,900 new homes were forecast to be built this year and existing stock levels were already very low.

“We do not have enough stock for sale,” Mr Hall said.

“Listings are hovering around 5,000. A balanced market is 13,000 to 13,500 properties for sale.”

A spate of recent builder bankruptcies was further compounding the shortage, he said.

And on the demand side, expected interest rate drops would further increase affordability, putting additional steam under prices.

Regional WA centres still booming

Reflecting the impact of the stock shortage, the Perth rental market was thriving, according to Claudette Swift, Principal of Buyers Agent Perth. 

“Rental yields remain high, with house rents up 6.4 per cent over the past year and units up 8.4 per cent,” Ms Swift told API Magazine. 

“The rental market is thriving, with median weekly house rents surpassing $670.”

Ms Swift said major infrastructure projects and a resilient economy were likely to continue to underpin the Perth market, driving “long-term demand and price increases.”

“While the market may experience a slight slowdown, it has not yet peaked,” she said. 

“Suburbs like Baldivis, Scarborough, and Bayswater are expected to see significant growth due to their affordability, lifestyle appeal and proximity to the CBD.”

There were also promising investment opportunities in parts of regional Western Australia. 

“Broome is offering high rental yields and significant capital growth driven by tourism and mining; Geraldton is benefiting from industry development and population growth; Albany is known for its scenic beauty and growing tourism sector,” Ms Swift said. 

US President Donald Trump’s tariff wars added a degree of uncertainty to the outlook, but this would be at least partly offset by stimulus measures, including further cuts to interest rates.

“Predictions of the Reserve Bank dropping the cash rate, suggest further increased demand extending throughout the second half of 2025,” Ms Swift said. 

“Overall, the Perth property market and regional areas in Western Australia offer strong investment potential, with various factors supporting continued growth the market that looks promising for home buyers and investors alike.”

Mining for market clues

The Perth property market sat in the doldrums in the wake of the GFC and throughout much of the 2010s, so property watchers know the city does not always deliver the type rapid capital growth seen in the past few years.

Julie Kelley, Global Sales and Marketing Manager for aussieproperty.com, said Perth was well positioned to avoid a major downturn but the economic waters were too muddy at the moment to see clearly into the year or two ahead.

“Perth buyers are traditionally quite risk averse as they have been stung in previous mining downturns.

“If the resources sector was to slow down appreciably due to a China retraction fuelled by trade wars, then nothing is really off the table.

“But household debt levels in Perth are low compared to other cities, so there would be a limited volume of distressed sales if the economy went south in a big way and that would cushion the real estate market somewhat against big price falls.

“Given how wildly unpredictable the global economy is at the moment, it is difficult for anyone to make a confident prediction one way or another, but if the Trump tariff chaos proves temporary it could lead to a confidence spike, while a prolonged global trade war could impact Western Australia’s mining economy perhaps more than other states.

“Either way, the property market in Perth does appear likely to hold its ground in a worst case scenario or continue delivering relatively strong growth, even if not at 2024 levels, if a global recession is averted,” Ms Kelley said.

Mr Townsend agreed that the fundamentals of the Perth market remained strong, with migration a factor that was also putting pressure on rents and housing stock.

“We do feel there are still gains to be had as a whole,” he said.

“Some investor-driven markets are beginning to taper off, but quality and well-located suburbs with good amenity are still performing well and selling above asking price ranges.

“Upgrader suburbs in the $800,000 to $1.2 million range in some of our coastal suburbs in the north are very active with buyers,” he said.

“For example, there have been strong turnouts for open homes in suburbs around the City of Joondalup, Cockburn and Stirling.”

Activity was more sluggish at the cheaper end of the market.

“Properties in the lower quartile that experienced the higher growth through Covid have seen a price growth slowdown and increase in time to sell, with buyers having a bit more choice,” Mr Townsend said. 

“This includes some parts of Kwinana (including suburbs like Orelia, Medina and Calista), Armadale and Gosnells, to name a few.”

“Yet the shortage of stock would continue to underpin the market as a whole.

“Demand in Perth is still outstripping the available supply in most suburbs.

“Until this is addressed, pricing pressure on both rentals and properties for sale will likely remain.”