What to Expect in Perth's Property Market for 2025
As we step into 2025, the Perth property market is poised to undergo some significant transformations. So what are the key drivers that will influence the market for the year ahead?
Before looking into the crystal ball to see what’s in store for 2025, let’s take a pulse check on where the Perth market is currently sitting.
Recent trends show a stabilisation in rental prices and a slowdown in house price growth in Perth.
These changes stem from a slight increase in rental and sales stock, both of which have been severely undersupplied in recent years, coupled with an easing in population growth following a surge in people moving to Western Australia post pandemic.
What’s been happening with Perth property sales?
The number of properties for sale has increased from rock-bottom levels. By December 2024, listings rose to 4,775, marking a notable increase from 2,788 listings in December 2023.
Despite this increase, it’s important to note that REIWA states a balanced market is when about 12,000 properties are listed for sale. With this in mind, the market is still very much undersupplied.
What’s been happening with the Perth rental market?
Rental inventory grew in 2024. By the end of December, there were 1,806 properties available for rent, reflecting a 19% increase compared to the same period in 2023. However, with the rental vacancy rate still sitting about 2% (REIWA says a balanced market is closer to 4-5%), stock levels are still very much depressed.
What can we expect in 2025?
To help understand what’s in store for 2025, there are several key factors that will influence the market for the next 12 months.
- WA’s Population Growth
The latest statistics from the ABS show WA’s population growth was the fastest of all states and territories in Australia.
It’s important to keep in mind the state’s population growth has started to ease after hitting its post-pandemic peak of 3.3% growth in December 2023.
For 2025, WA’s population growth is expected to remain high, albeit at more sustainable levels compared to that of recent years.
- WA State & Federal Government Elections
2025 will be a year in which elections are held for both the WA state government as well as the Federal government.
Housing is set to be a key issue in both elections as both governments grapple with shortages in housing supplies.
The only new policy to be announced recently is the WA Liberals' proposal of a $20,000 rebate on transfer duty for eligible downsizers.
By reducing upfront costs, this initiative aims to encourage downsizing, freeing up family homes and optimising housing stock utilisation.
Stay tuned for more policy announcements from other parties, which could significantly impact the Perth property market.
- Interest Rate Movements
The Reserve Bank of Australia (RBA) is expected to reduce interest rates in 2025.
Commonwealth Bank forecasts the first cut in February, with the cash rate dropping to 3.35% by year-end.
Other banks predict similar timelines, with rate reductions beginning in May 2025.
Regardless of timing, a reduction in interest rates typically means people can borrow more money, which can lead to property price growth or at least prices remaining buoyant.
- WA’s Economy
WA’s domestic economy outperformed the national average in 2023-24, with a 5.7% growth in State Final Demand.
This momentum is projected to continue, with a 3.5% increase anticipated for 2024-25, fueled by business investment, household consumption, and population growth.
The state’s resources sector continues to power along with strong iron ore and gold prices, which will help underpin the Perth property market.
Key Takeaways
In 2025, Perth’s property market will be shaped by political policies, economic conditions, and demographic shifts.
Property investors should closely monitor these developments to navigate the evolving landscape.
With higher rental and sales listings, buoyant population growth and a strong economy, 2025 promises to be a dynamic year for the Perth property market.
Sources:
Redirecting. (2025, January 6). https://www.google.com/url?q=https://www.abc.net.au/news/2025-01-06/rba-interest-rate-cuts-forecast-in-2025-what-to-watch/104751214&sa=D&source=docs&ust=1736828466375117&usg=AOvVaw2qdXQXmm3YyEkwOFHFuMU8
National, state and territory population, June 2024. (2024, December 12). Australian Bureau of Statistics. https://www.abs.gov.au/statistics/people/population/national-state-and-territory-population/jun-2024
Perth weekly market snapshot for the week ending 29 December 2024. (n.d.). REIWA Public Website. https://reiwa.com.au/news/perth-weekly-market-snapshot-for-the-week-ending-29-december-2024/
Monthly updates. (n.d.). https://www.watc.wa.gov.au/economic-insights/market-updates/monthly-updates
2024-25 Western Australia State Budget | Economic and fiscal outlook. (n.d.). https://www.ourstatebudget.wa.gov.au/2024-25
