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Perth's property market continues to lead Australia with exceptional growth rates and strong fundamentals. The city has experienced remarkable price appreciation, with median house prices rising significantly over the past year, driven by population growth, economic resilience, and supply constraints that show no signs of immediate relief.
As of September 2025, Perth's property market presents both opportunities and challenges for investors and homebuyers. While affordability has diminished compared to previous years, the city still offers compelling investment prospects with strong rental yields and projected continued growth, albeit at a more moderate pace than the explosive gains witnessed in 2024.
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Perth's property market remains the strongest performer nationally, with median house prices reaching $770,000 in March 2025, representing a 24% annual increase, though growth is moderating from the explosive 2024 performance.
The rental market shows signs of rebalancing with vacancy rates rising to 2.5%, yet strong population growth and limited supply continue to support price appreciation and rental yields of 4-5% for investors.
| Market Indicator | Current Status (Sept 2025) | Key Trend |
|---|---|---|
| Median House Price | $770,000 | +24% annually, moderating growth |
| Median Unit Price | $520,000 | +20% annually, outperforming houses |
| Rental Vacancy Rate | 2.5% | Rising from 0.4% crisis levels |
| Weekly House Rent | $690 | +8% annually, growth slowing |
| Population Growth | 3.1% annually | Strong but moderating |
| Property Sales Volume | Down 4-10% | Softening from peak levels |
| 2025 Price Growth Forecast | 5-10% | Moderating but still strong |
What's the current median house price in Perth right now, and how does it compare to last year?
Perth's median house price reached $770,000 in March 2025, representing a substantial 24% increase from the same period in 2024.
This places Perth as Australia's fourth most expensive capital city, having surpassed Melbourne's median of $777,390. The city has experienced one of the most dramatic price surges in recent Australian property history, with values climbing over 75% since March 2020.
Despite this remarkable growth, Perth still maintains relative affordability compared to Sydney and other major capitals. The median house price has risen from approximately $745,000 in July 2024 to current levels, demonstrating the sustained momentum in the market throughout 2024 and into 2025.
Units have performed even more impressively, with the median unit price reaching $520,000 in March 2025, up 20% annually. This represents stronger growth than houses as buyers seek more affordable entry points into the market.
It's something we develop in our Australia property pack.
How many properties are being sold per month in Perth, and is that number rising or falling compared to the past 12 months?
Monthly property sales in Perth have decreased by approximately 4-10% compared to the previous 12 months, indicating a softening in sales activity as the market transitions from peak frenzy to more balanced conditions.
The total annual dwelling sales for the year to July 2025 reached 46,945 transactions. While sales volumes remain above the five-year average, the pace has clearly moderated from the exceptional activity levels seen throughout 2024.
This decline in sales activity aligns with market expectations as buyers become more cautious and take additional time to make purchasing decisions. Properties are now spending more time on the market, with houses taking a median of 22 days to sell and units taking 17 days as of early 2025.
The softening in sales volume is partly attributed to increased listings providing buyers with more choice, reducing the intense competition that characterized the 2024 market. New listings are up 25.5% from a year ago, giving purchasers more options to consider.
What's the current rental vacancy rate in Perth, and how does it compare to the national average?
Perth's rental vacancy rate reached 2.5% in March 2025, marking a significant improvement from the crisis levels of 0.4% recorded just 12 months earlier.
This 2.5% rate represents the first time since September 2019 that Perth has achieved what industry experts consider the lower threshold of a balanced rental market, which typically ranges between 2.5-3.5%. However, conditions vary dramatically between suburbs, with CBD-adjacent areas still experiencing vacancy rates below 1%.
Compared to the national average, Perth's vacancy rate remains relatively tight but has shown the most improvement of any major capital city. The national vacancy rate sits at 1.2% as of July 2025, making Perth's 2.5% appear relatively healthy.
Despite this improvement, rental market pressures persist due to Western Australia's continued strong population growth and an estimated 5% shortfall in rental properties compared to the February 2021 peak. The state added only 694 new rental dwellings in the 18 months to September 2024 while the population grew by 119,000 people.
How fast are rental prices rising in Perth, in percentage terms over the past year?
Rental prices in Perth have increased by approximately 8% over the past year, with the median weekly house rent reaching $690 in March 2025, up from $650 in early 2024.
Unit rents have shown similar growth patterns, rising from $600 per week to approximately $650 per week over the same period. This represents one of the strongest rental growth rates among Australian capital cities, driven by the previously tight vacancy conditions and strong tenant demand.
The rate of rental growth has begun moderating in 2025 as vacancy rates improved and more properties became available. Industry experts expect this moderation to continue throughout 2025, with periods of rental price stability becoming more common as the market rebalances.
Perth's rental growth significantly outpaces the national average and remains well above cities like Sydney and Melbourne, where rental increases have been more contained. The strong rental growth has contributed to gross rental yields of 4-5% for investors, well above the national average.
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How many new housing approvals or building permits are being issued in Perth each month?
Building approvals in Western Australia have shown improvement in recent months but remain insufficient to meet population-driven demand, with dwelling approvals recording a 19.6% increase between April and May 2024.
Despite this uptick, the state continues to face a significant supply deficit. Western Australia fell 4,000 homes short of the National Housing Accord target of 24,000 homes per year in 2024, despite completing more than 20,000 homes - the highest number since 2017.
The approval process has been hampered by land availability issues, with the state government being slow to release new land for development in Greater Perth. This has contributed to a 38.6% increase in the median price of shovel-ready blocks in just one year.
Construction delays remain a critical issue, with build times in Western Australia now extending beyond 15 months - the longest in Australia. These delays add up to $100,000 to the average cost of a new home, further constraining supply and supporting price growth for existing properties.
What's the population growth rate in Perth, and how many people are expected to move there in the next 5 years?
Perth's population is growing at an exceptional rate of approximately 3.1% annually, making it one of Australia's fastest-growing capital cities and a key driver of housing demand.
Western Australia's population grew by 119,000 people in the 18 months to September 2024, with Perth absorbing the majority of this growth. This rapid expansion is fueled by both interstate migration from other Australian states and strong overseas migration.
The state leads the nation in population growth metrics, with Western Australia recording the strongest population growth figures in the latest CommSec State of the States report. This growth is primarily driven by the state's robust economy, particularly the resources sector, and relatively affordable living costs compared to eastern capitals.
Over the next five years, population projections suggest continued strong growth, though at a potentially moderated pace. The combination of economic opportunities, lifestyle factors, and comparative affordability is expected to maintain Perth's appeal for both interstate and international migrants.
How does housing supply compare to demand in Perth — is there a shortage or an oversupply, and by how many homes?
Perth faces a severe housing shortage with demand substantially outpacing supply across all property types, creating one of Australia's most constrained housing markets.
The Urban Development Institute of Australia (UDIA) has forecast a shortfall in excess of 30,000 dwellings over the next five years if current trends continue. This represents one of the most significant supply-demand imbalances in Australian property markets.
For the rental market specifically, Perth is approximately 7,700 rentals short of meeting population growth-led demand. The addition of only 694 new rental dwellings in 18 months while the population increased by 119,000 highlights the severity of the supply constraint.
New housing completions, while reaching a seven-year high of over 20,000 homes in 2024, still fell 4,000 homes short of the National Housing Accord target. The combination of slow land releases, extended approval processes, and construction delays continues to limit supply expansion despite strong demand.
It's something we develop in our Australia property pack.
What's the current unemployment rate in Perth, and how does it affect property affordability?
Western Australia maintains one of the strongest labor markets in Australia, with unemployment rates remaining below 4% throughout 2024 and into 2025, supported by the robust mining and resources sector.
The state's resources sector contributed over $210 billion to the economy in 2024, helping maintain employment stability and attracting workers from other states. This economic strength has been a fundamental driver of population growth and housing demand.
Despite low unemployment, housing affordability has become a significant challenge. More than 210,000 Western Australian households now consider their housing unaffordable, representing a 91% increase since 2022. Only 39% of renters and 48% of mortgage holders consider their housing costs affordable.
Key workers including nurses, police officers, and firefighters on single incomes are effectively priced out of homeownership in many Perth areas. The disconnect between wages and housing costs has become particularly pronounced, with housing costs rising faster than income growth across most demographic groups.
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What percentage of income do Perth households currently spend on mortgage repayments or rent?
Perth households allocate approximately 33% of their household income to mortgage repayments, making the city significantly more affordable than New South Wales where homeowners spend 87% of their income on mortgage payments.
For renters, housing stress is more pronounced, with many households spending well above the recommended 30% of income on rental costs. The median weekly rent of $690 for houses represents a substantial portion of median household incomes, particularly for lower-income earners.
First-home buyers face particular challenges, with many needing to allocate 54.4% of their income to mortgage repayments at current interest rates and house prices. This has pushed many potential buyers toward units or forced them to consider outer suburban locations.
The affordability situation has deteriorated significantly since 2020, when Perth was considered one of Australia's most affordable capital cities. Rising property values have eroded much of the city's traditional affordability advantage, though it remains more accessible than Sydney, Melbourne, and Canberra.
How do Perth's interest rates and lending conditions compare with other Australian cities?
Perth operates under the same national interest rate environment as other Australian cities, with the Reserve Bank of Australia maintaining the cash rate at 3.85% as of September 2025, down from the peak of 4.35%.
Lending conditions in Perth are identical to other Australian markets in terms of serviceability criteria and deposit requirements. However, the city's relative affordability means borrowers can access similar properties with lower loan amounts compared to Sydney or Melbourne.
Major banks including NAB, Westpac, and ANZ expect further interest rate cuts throughout 2025, with potential reductions beginning as early as May 2025. These anticipated cuts could provide additional stimulus to Perth's already strong property market.
The Australian Prudential Regulation Authority (APRA) maintains a 3% serviceability buffer across all markets, though this may be relaxed as economic conditions improve. Any reduction in this buffer would increase borrowing capacity for Perth buyers, potentially adding further momentum to price growth.
How much foreign and interstate investment is currently going into Perth's property market?
Interstate investment has surged dramatically, with 37% of all property transactions in the Perth metropolitan area now being made by buyers from Australia's east coast, according to Lendi data.
Investor activity in Western Australia increased by 53% over the year to May 2024, though this surge is coming from a historically low base. The portion of investors in WA property transactions reached 36% in early 2025, up from 29.5% the previous year.
Foreign investment remains limited due to recent regulatory changes. From April 2025 to March 2027, foreign investors are generally prohibited from purchasing established dwellings, with limited exceptions. This restriction has reduced foreign buyer activity compared to previous years.
The massive influx of interstate investors has created what analysts describe as a "two-speed property market," where some suburbs experience rapid price growth driven by external demand while others grow at more sustainable rates supported by local buyers. This dynamic raises concerns about market sustainability in heavily investor-targeted areas.
What's the forecasted annual growth rate for Perth property prices over the next 3 to 5 years, in percentage terms?
Perth property prices are forecast to grow by 5-10% annually in 2025, representing a significant moderation from the 24% growth experienced in 2024 but still leading national growth expectations.
| Forecast Period | House Price Growth | Unit Price Growth |
|---|---|---|
| 2025 | 5-10% | 8-15% |
| 2026 | 4-6% | 5-8% |
| 2027-2030 (Annual Average) | 6-8% | 3.5-4% |
| Projected Median House Price by 2030 | $1.4 million+ | $650,000 |
| Total 5-Year Growth Expectation | 80-100% | 60-80% |
Major bank forecasts vary slightly, with NAB predicting 4.7% growth in 2025 and Westpac forecasting 4.0%. KPMG expects house prices to grow 5.2% in 2025 before accelerating in subsequent years as interest rates decline and market conditions normalize.
Long-term projections suggest Perth's median house price could exceed $1.4 million by 2030, driven by continued population growth, economic resilience, and ongoing supply constraints. Units are expected to reach a median of $650,000 by 2030.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Perth's property market represents a compelling but evolving investment opportunity in 2025. While the explosive growth of 2024 is moderating, the city's strong fundamentals including population growth, economic resilience, and supply constraints continue to support price appreciation.
For investors and homebuyers, timing and location selection remain critical. The market is transitioning from crisis-level tightness to more balanced conditions, offering better opportunities for informed decision-making while still providing strong returns for well-positioned investments.
Sources
- OpenAgent Perth Property Market Data
- Soho Real Estate Perth Property Predictions
- Property Update Australian Market Forecasts
- REIWA Market Forecast Update
- HERE Property Perth Market Predictions
- BCEC Housing Affordability Report WA 2025
- Broker News Perth Vacancy Rate Report
- KPMG Property Report 2025
- FTI Consulting Perth Housing Market Analysis
- API Magazine Interstate Investment Analysis