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Perth’s property market is poised for growth of up to 10 per cent in 2025, according to the latest quarterly update from the Real Estate Institute of Western Australia (REIWA).
REIWA’s chief executive officer, Cath Hart, revealed that Perth’s median house price surged by 24.2 per cent in 2024, climbing from $600,000 in late 2023 to $745,000 by December 2024.
Meanwhile, the median unit price increased by 21.4 per cent, rising from $412,000 to $500,000.
“The median house and unit sale prices are expected to grow in 2025, but at a slower rate than 2024. Based on current conditions, REIWA is expecting between 5 and 10 per cent growth,” Hart stated.
At the end of 2024, Perth’s median house price was 36.7 per cent above its previous peak of $545,000 in 2014, with unit prices 11.1 per cent higher than their 2014 record of $450,000.
Hart noted that market activity in the first half of 2025 could be influenced by state and federal elections, as well as interest rate trends.
“We know market activity often slows in the lead-up to elections as buyers and sellers wait to see the outcome,” she said.
“This is especially so when housing is one of the key policy areas — as will be the case in both elections.”
With interest rate cuts potentially being another factor, Hart suggested that a rate decline could boost buyer confidence and market activity.
Despite a cooling pace of growth in late 2024, Perth’s property market remains a seller’s market. Population growth of 2.8 per cent in the year to June 2024, low unemployment, and a robust economy continue to drive demand.
“While some of the urgency seen in 2024 has eased slightly, demand for established housing remains high, with properties still selling quickly,” she said.
Hart predicted that affordability will become a greater concern for buyers in 2025, with heightened demand for affordable properties and suburbs. She also highlighted the growing appeal of units as an entry point to the market.
The vacancy rate rose to 1.9 per cent by the end of the year, easing from a record low of 0.4 per cent in March, impacted by new supply from completed investor-owned builds and adjustments to rising rent prices.
In the rental sector, 2024 saw the median dwelling rent stabilise at $650 per week, an 8.3 per cent annual increase. House rents reached $670 per week by the end of 2024, a 3.1 per cent increase compared to the end of the September quarter and 8.1 per cent higher year-on-year.
The median weekly rent price climbed to $650 by the end of 2024, rising 14 per cent over 2024 and was marked 8.3 per cent higher than at the end of the September quarter.
Hart highlighted that rent price growth was likely in 2025, however, the growth rate is expected to be lower than in 2024.
“In the Perth rental market, we are likely to see more periods of rent price stability,” she noted.
Hart noted that rental market pressures are expected to ease as more investor-owned new builds currently under construction are completed. However, with a decline in eastern states investor activity, Hart highlighted that a significant increase in new supply is unlikely later in the year.
Following the changes in 2024, vacancy rates are expected to rise, potentially leading to a more balanced market in 2025.
Demand will likely remain highest for rental near the CBD, lifestyle hubs and major transport infrastructure, while areas on Perth’s outskirts with abundant new supply may see slower rent price growth.
In regional Western Australia, growth in median house prices is expected to vary in 2025, with the strongest increases predicted in southern centres. Bunbury led the way in 2024 with a 27.3 per cent increase, driven by strong employment, improved amenities and the Busselton airport, attracting FIFO families seeking a south-west lifestyle.
Growth of 10-15 per cent is predicted for Bunbury, Albany and Geraldton in 2025, while Broome, Busselton and Esperance could see increases of 5-10 per cent.
Conversely, Kalgoorlie, Karratha and Port Hedland are anticipated to see modest growth of up to 5 per cent.
“Towards the end of 2024, some regional rental markets showed signs of easing. Others have the potential for more growth and, as with Perth, the rate of growth is likely to slow over 2025,” Hart concluded.
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