Authored by the expert who managed and guided the team behind the Australia Property Pack
Yes, the analysis of Perth's property market is included in our pack
Are you curious about how the real estate market in Perth will evolve by 2025? Wondering if now is the right time to invest in a property? Eager to know which areas will see the most growth and what trends will shape the market?
We will lay down recent insights, providing you with a clear picture of what to expect. Here, no guesswork, we rely only on solid data to bring you 16 strong forecasts for Perth's real estate landscape in 2025.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Australia Property Pack
1) Perth's residential property prices will rise due to population growth and limited housing supply
Perth's property market is buzzing, with residential prices steadily climbing thanks to a mix of population growth and limited housing supply.
In 2023, Greater Perth's population jumped by 3.65%, a trend that's been consistent for years. This influx of new residents is driving up demand for homes, making it a hot spot for potential buyers. Imagine the city as a magnet, pulling in people with its vibrant lifestyle and opportunities.
But here's the catch: the construction sector is struggling to keep up. Fewer new homes are being built, and this shortage is pushing prices higher. In fact, despite high interest rates, property prices soared by over 20% in 2024. The scarcity of land for new developments only adds to the challenge, making it tough to expand the housing supply.
Perth's job market is another big draw. With strong employment opportunities, more people are flocking to the city, further boosting housing demand. Economic forecasts are optimistic, predicting ongoing job growth that supports the upward trend in property prices.
Real estate analysts are buzzing with predictions. They suggest that property prices in Perth could rise by 14 to 19% in 2025. This is fueled by solid employment growth and a steady increase in population, making it a promising time for investors and homebuyers alike.
So, if you're considering buying property in Perth, keep an eye on these trends. The combination of limited housing supply and a growing population is setting the stage for continued price increases, making it a potentially lucrative investment.
Sources: Domain, Profile ID, Sherlock HG
2) Southern suburbs will see a steady rise in property values as retirees seek a quieter lifestyle there
The southern suburbs of Perth are becoming a hotspot for retirees, leading to a steady rise in property values.
Take Shelley, for example, where the median house price jumped by 29.7% in 2023, reaching $1.14 million. This surge reflects a strong demand for homes, especially from those seeking a quieter lifestyle. It's not just Shelley; suburbs like Seville Grove and Mount Pleasant are also seeing significant rent hikes, with increases of 38.1% and 34.6% respectively. This trend underscores the high demand for housing, pushing property values even higher.
What makes these areas so appealing? Surveys and lifestyle publications often highlight their charm, particularly for retirees. The development of retirement-friendly amenities is a big draw. For instance, Cambrai Village offers fully maintained three-bedroom duplexes and a 79-bed residential care facility, catering specifically to retirees' needs. These amenities, along with improved public transport and infrastructure, make the southern suburbs increasingly desirable.
Retirement villages are popping up, offering a range of services that make life easier and more enjoyable for retirees. This development is a clear sign of the growing popularity of these areas. The southern suburbs are not just about homes; they're about a lifestyle that appeals to those looking for peace and convenience.
As these suburbs continue to evolve, they attract more retirees, further driving up property values. The combination of a peaceful environment, modern amenities, and a strong community feel makes these areas a top choice for those looking to settle down in a quieter setting.
Sources: REIWA, Property Clearance, Savings.com.au, SwanCare
Everything you need to know is included in our Real Estate Pack for Perth
3) Perth's luxury rental yields will stay stable as high-income tenants seek premium properties
In 2023, Perth's luxury rental market showed impressive stability, with top suburbs like Medina, Armadale, and Brookdale achieving a 6.3% rental return for houses.
By the end of 2023, rent prices hit record highs and the vacancy rate dropped to a historic low of 0.6%, making it a landlord's market. This means if you're considering investing, you'll likely find tenants quickly and at premium rates.
Perth's population grew by 3.3% to 2.905 million by September 2023, largely due to net overseas migration. This influx included many high-income individuals, which is why Perth boasts four of Australia's five most advantaged suburbs.
The demand for luxury properties in Perth remains strong, driven by affluent individuals and expatriates. This trend is expected to continue, thanks to Perth's stable and growing economy and the development of new luxury properties.
High-income tenants are consistently seeking premium properties, ensuring that rental yields in Perth's luxury market remain stable. This is great news for investors looking for reliable returns.
Sources: Smart Property Investment, World Population Review, API Magazine
4) Rental yields in Perth's inner suburbs will rise as rental demand outstrips supply
In 2023 and 2024, rental prices in Perth's inner suburbs surged, catching the attention of potential property investors.
Take Brookdale, for example, where rents jumped by 23.9% annually, resulting in a rental yield of 6.0%. This wasn't just a one-off; other inner suburbs saw similar trends as demand outstripped supply.
By August 2024, Perth's vacancy rate was at 1.4%, a clear sign of fewer available rentals and a booming demand. This tight market naturally pushed rental prices and yields higher.
Perth's population grew by 3.6% last year, adding 81,300 new residents, thanks to both internal and overseas migration. Suburbs like Bentley, Wilson, and St James saw a notable influx, with 1,700 new overseas arrivals.
New housing developments in the inner suburbs were limited, which only worsened the housing shortage. This scarcity meant existing rentals were in high demand, driving up rental yields.
Economic reports highlighted job growth in Perth’s central business district, likely drawing more residents and boosting demand for rentals in inner suburbs. This job growth was a key factor in the population increase and housing demand.
Sources: Satterley, REIWA, The West Australian, Simply Wealth Group
5) Perth suburban rental yields will drop as more properties become available for rent
In Perth's suburbs, rental market dynamics are shifting noticeably.
Recently, the vacancy rate climbed from 0.4% to 0.7%, indicating more rental properties are available. This uptick suggests that landlords might face challenges in maintaining high rental yields as tenants have more options to choose from.
Adding to this, the state government is pushing for more rental developments by offering a 50% land tax exemption for build-to-rent projects. This incentive is encouraging a surge in new rental properties, which means landlords could find themselves in a more competitive market, potentially lowering rental yields.
Economic reports are also hinting at a slowdown in demand for suburban rentals. Real estate experts note that high-end properties are taking longer to lease, suggesting that the demand isn't quite matching the growing supply. This mismatch can lead to landlords reducing rents to attract tenants.
Media outlets are echoing these sentiments, pointing out an oversupply of rental properties in suburban areas. With more properties than tenants, landlords might have to lower rents to fill vacancies, impacting overall rental yields.
For those considering buying property in Perth's suburbs, it's crucial to understand these dynamics. The combination of increased supply and fluctuating demand could mean that rental yields might not be as robust as they once were.
Sources: REIWA, D Residential, Here Property
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6) Chinese investors will renew interest in Perth real estate as Australia strengthens trade ties with China
Chinese investors are once again eyeing Perth's real estate market, and there's a good reason for it.
In 2023, these investors poured a whopping $3.4 billion into Australian residential properties, marking a significant 40% jump from the previous year. This surge isn't just about numbers; it reflects a growing confidence in the Australian property scene. Historically, whenever Australia and China have enjoyed strong trade ties, Chinese investments have soared. For instance, between 2008 and 2016, Chinese businesses funneled over $100 billion into Australia, aligning with strategic trade partnerships.
Now, as Australia strengthens its trade relations with China, we're likely to see a similar uptick in investment activity. Perth, in particular, is catching the eye of Chinese investors. This interest isn't just a passing trend; it's driven by economic factors and the increasing wealth of Chinese investors seeking stable and promising opportunities. Real estate agencies in Perth are buzzing with inquiries from Chinese buyers, signaling a renewed focus on the region.
Media reports are also highlighting this growing interest, pointing to a broader economic trend. Chinese investors are not just looking for any property; they are seeking out areas with potential for growth and stability. Perth fits the bill perfectly, offering a mix of urban development and natural beauty that appeals to international buyers.
For those considering buying property in Perth, this influx of Chinese investment could mean increased competition but also a boost in property values. It's a dynamic market, and understanding these trends can provide a strategic advantage. As trade relations between Australia and China continue to strengthen, the real estate market in Perth is poised for exciting developments.
Sources: Property Update, Munk School of Global Affairs & Public Policy, Nick Wallace
7) Rental demand in Perth's student areas will rise and boost yields in these neighborhoods
The demand for rental properties in Perth's student areas is on the rise due to several key factors.
Universities in Perth, like the University of Western Australia, are seeing a big comeback of international students in 2023, especially from India and southern Asia. This trend is expected to continue as 23 universities in Australia plan to enroll more foreign students in 2025 compared to 2023. This influx is a major driver for rental demand in student neighborhoods.
There's a chronic shortage of Purpose Built Student Accommodation (PBSA) in Perth, pushing many students to seek off-campus housing. This lack of on-campus options is a significant driver of demand for rental properties in student areas. Plus, the rental market in Perth is tight, with low vacancy rates, especially near universities, showing strong demand.
Rental prices in these student areas are climbing. For example, the median rental price for houses jumped from $585 per week last year to $650 per week over the 12 months ending in August 2024. Similarly, the median rent for units rose from $530 per week in 2023 to $600 per week in the same period. These rising prices highlight the growing demand for housing in these areas.
Investors are taking note of these trends, as the potential for higher rental yields in student areas becomes more apparent. With more students arriving and limited housing options, landlords can expect increased competition for their properties, leading to better returns.
For those considering buying property in Perth, focusing on student areas could be a smart move. The combination of increasing student numbers and limited accommodation options suggests a promising outlook for rental income. This makes student neighborhoods a potentially lucrative investment opportunity.
Sources: Savills Asia, Shiksha, Here Property
8) Perth property prices will drop in mining-dependent areas due to fluctuating commodity prices
Perth's housing market has a history of rising and falling with commodity prices.
When commodity prices dip, areas in Perth that rely on mining often see property values drop. This is because lower commodity prices usually mean less investment in the mining sector, which can hurt local economies and housing markets.
Right now, we're noticing a trend of falling commodity prices, especially for iron ore. This could lead to less investment in mining, potentially lowering property prices in areas heavily dependent on this sector.
Fewer job opportunities in mining due to falling commodity prices can also reduce housing demand. A report by SQM Research highlights Perth's vulnerability to these price changes.
Employment in the mining sector is crucial for Western Australia. If commodity prices keep dropping, it could lead to job losses, which would decrease housing demand.
Past downturns in mining towns show that property markets often suffer when the mining sector struggles. For example, during the last decade, Perth's housing market took a hit when commodity prices fell.
Experts like Louis Christopher from SQM Research have warned that volatility in commodity prices could affect Perth's housing market. He suggests that a major downturn in global commodity markets could end the current boom in Western Australia.
Sources: REIWA, Domain, Broker News, MacroBusiness
Everything you need to know is included in our Property Pack for Perth
9) Properties near the Swan River will significantly increase in value due to rising demand for waterfront living
Properties near the Swan River are expected to see a significant appreciation in value due to increased interest in waterfront living.
In Perth, the luxury property market is thriving, especially in areas like Applecross and South Perth, which are close to the water. This boom is largely driven by high-net-worth individuals and a robust local economy. Luxury apartments are becoming a favorite among owner-occupiers, reflecting a broader trend. Historical data shows a 21% increase in residential property prices in Perth over the 12 months leading up to the end of 2024.
Government investment is playing a big role in this trend. By enhancing public amenities along the Swan River, these areas are becoming even more appealing. This investment not only improves the quality of life for residents but also boosts property values by making the area more desirable.
Media reports and buyer preferences show a strong appetite for properties with scenic views, which is further driving interest in waterfront living. The allure of living by the water is not just a local phenomenon; it's part of a global trend. The Knight Frank Global Waterfront Index highlighted a 118% average price increase for waterfront properties worldwide in 2023, underscoring the rarity and desirability of such locations.
In Perth, this trend is particularly evident in the luxury market, where demand is surging. The combination of a strong local economy and the appeal of waterfront living is creating a perfect storm for property appreciation. As more people seek out these prime locations, property values are expected to continue rising.
Sources: World Property Journal, API Magazine, Savings.com.au
10) Perth's aging population will boost demand for single-story homes and retirement communities
The aging population in Perth is driving up demand for single-story homes and retirement communities.
Between 2023 and 2024, Perth saw a noticeable increase in older adults, and by 2031, the population aged 65 and over is projected to rise by 43.1%. This surge means there's a growing need for housing that suits their specific needs. Older adults often prefer homes that are easy to manage and accessible, which is why single-story homes are in high demand.
Surveys show that seniors want to live near friends, family, and essential amenities, making single-story homes an attractive choice. The real estate market in Perth reflects this trend, with increased sales of single-story homes in recent years. This shift is not just about convenience; it's about creating a lifestyle that supports their social and practical needs.
Retirement communities are also on the rise, thanks to initiatives like the McGowan Government's "An Age-Friendly WA: State Seniors Strategy." This strategy aims to provide suitable housing options for seniors, ensuring they have access to communities that meet their needs. High occupancy rates in existing retirement communities show just how much demand there is for these housing solutions.
These communities offer more than just a place to live; they provide a sense of belonging and security. With government support, developers are keen to create environments where seniors can thrive. The focus is on building communities that offer not just housing, but a lifestyle that promotes well-being and social interaction.
Sources: Ageing with Choice Future Directions for Seniors Housing, An Age-Friendly WA: State Seniors Strategy, Population and Age Structure | City of Perth
11) Luxury properties in Perth's western suburbs will attract high-net-worth individuals and drive up prices
Luxury properties in Perth's western suburbs are a magnet for high-net-worth individuals.
In 2023-2024, a record number of suburbs joined Perth’s million-dollar club, with many nestled in the western region. Take Peppermint Grove, for instance, where the median house sale price hit $3,700,000, underscoring its allure for affluent buyers. This area isn't just about price tags; it's about lifestyle, with its leafy streets and proximity to the Swan River.
Suburbs like Shenton Park, Cottesloe, and Claremont have seen double-digit growth in property prices since December 2023. This surge is largely due to the rise in white-collar executive jobs, drawing high-net-worth individuals who seek both prestige and convenience. These areas offer not just homes, but a community of like-minded professionals.
Known as the Golden Triangle, Perth’s western suburbs boast affluent communities and high median house prices. The scarcity of available land and properties only adds to their desirability, pushing prices even higher. It's a classic case of supply and demand, where exclusivity breeds interest.
For those eyeing luxury real estate, these suburbs offer more than just a home; they provide a lifestyle marked by exclusivity and prestige. The limited availability of properties ensures that demand remains high, making these areas a sound investment for those who can afford it.
With their unique blend of natural beauty, community, and convenience, Perth's western suburbs will continue to be a top choice for luxury buyers. The ongoing attraction of high-net-worth individuals will keep driving up prices, making these areas a hotbed for real estate investment.
Sources: REIWA, API Magazine
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12) Perth's northern suburbs will become hotspots for young families with new schools and family-friendly amenities
The northern suburbs of Perth are becoming a magnet for young families, thanks to new school developments.
In 2023 and 2024, construction kicked off on several schools, including the Eglinton South West Primary School, which will open in 2025 for 620 students. This is part of a massive $4.4 billion investment by the Western Australian Labor Government, focusing on educational infrastructure in these suburbs.
These new schools are set to relieve the pressure on existing ones, showing a clear demand for more educational facilities. Young families often look for good schools when deciding where to settle, and the availability of modern, well-equipped schools makes these suburbs very appealing. Plus, new parks and recreational spots, like the award-winning Wellington Square, add to the family-friendly vibe.
Real estate trends reveal a big jump in housing demand in these areas, with some suburbs seeing house prices rise by up to 50% in the past year. This boom is fueled by the combination of new schools and the growth of family-friendly amenities, turning the northern suburbs into a hotspot for young families.
Sources: WA Government, Mirage News, Savings.com.au
13) Eastern suburbs will see property values rise as infrastructure projects improve city center connectivity
The eastern suburbs of Perth are on the brink of a property value surge, thanks to major infrastructure projects enhancing city connectivity.
In recent years, the Western Australian government has poured resources into METRONET, a transport initiative designed to boost Perth's connectivity. With projects like the Yanchep Rail Extension and the Morley-Ellenbrook Line now complete, new train stations and improved public transport options are available for residents. This makes the eastern suburbs more appealing to potential homebuyers.
Homebuyers today are keen on areas with strong public transport links. The new train lines and better roads in the eastern suburbs are likely to draw more buyers who want easy access to the city center. Real estate experts are eyeing suburbs like Redcliffe and Morley, noting their potential for significant growth due to these developments.
The eastern suburbs are also seeing a population increase, thanks to their proximity to the city and improved transport links. This demographic shift, coupled with a limited housing supply, is pushing property values up. Historically, Perth's median house value has seen substantial increases, and experts are forecasting further price hikes in 2025.
These infrastructure upgrades are not just about transport; they are expected to attract commercial and retail developments too. This will likely boost property values even more, making these suburbs more attractive to both residents and investors.
With all these changes, the eastern suburbs are becoming a hotspot for those looking to invest in property. The combination of improved connectivity, population growth, and potential commercial development is setting the stage for a thriving real estate market in these areas.
Sources: Our State Budget, Savings.com.au, City of Bayswater, Realestate.com.au, Infrastructure Pipeline
14) Virtual reality will transform Perth property marketing enabling buyers to view homes remotely easily
Virtual reality is changing how properties are marketed in Perth, making it easier for buyers to view homes remotely.
By 2025, the global VR in real estate market is set to hit USD 3,161.2 million, showing a big leap from previous years. This growth is clear as 1.4 million real estate agents worldwide are already using VR, and the numbers are climbing. Buyers love virtual tours; 67% prefer them when checking out listings. In fact, more than half of buyers, 54% to be exact, won't even look at a property without a virtual tour.
Homes with virtual tours get 87% more views than those without, and potential buyers spend much more time on these listings. In Perth, more agencies are jumping on the VR bandwagon, offering virtual tours as part of their services. This trend is fueled by advancements in VR tech, making it more accessible and affordable for everyone involved.
VR not only saves time and money for real estate agents by cutting down on in-person viewings but also makes the buying and selling process smoother. It's a win-win for both sides, enhancing the overall experience. The convenience of virtual tours means buyers can explore properties from the comfort of their homes, making it easier to shortlist options before visiting in person.
Sources: The AR/VR Market and Real Estate - Encora, How Virtual Reality Benefits The Real Estate Industry (+Examples), The Revolutionary Impact of Virtual Tours on Real Estate
Everything you need to know is included in our Pack for Perth
15) Perth's public transport expansion will boost property values in previously underserved areas
The expansion of Perth's public transport network is set to increase property values in previously underserved areas.
When new transport links are introduced, more people start using public transport. For example, the Public Transport Authority Annual Report for 2023-24 noted a 17% increase in total boardings. This uptick in usage often leads to higher property values in areas with improved transport access.
Living close to public transportation can significantly boost property values. Properties near quality transit can see values over 15% higher than those farther away. This isn't just a recent trend; historical data shows that new transit infrastructure has a substantial impact on property values.
Real estate experts predict that the ongoing rollout of Metronet will positively affect real estate values near new stations. Suburbs like Bayswater and Forrestfield are expected to benefit due to their established infrastructure and potential for long-term growth. The METRONET program, with its $3.1 billion investment, is designed to drive economic growth and increase property values in areas with better transport connectivity.
Government reports highlight that this investment is not just about transport but also about boosting local economies. The improved connectivity is expected to make these areas more attractive to both residents and businesses, further driving up property values.
For those considering buying property in Perth, understanding these dynamics can be crucial. Areas with new or improved transport links are likely to see a rise in demand, making them potentially lucrative investments.
Sources: Public Transport Authority Annual Report 2023-24, Value of Properties Near Public Transport, Informed Predictions for the Year Ahead, Western Australia's State Infrastructure Programme 2023
16) Blockchain will streamline Perth property transactions reduce costs and increase transparency
Blockchain is transforming how real estate deals are done in Perth.
Platforms like Propy are leading the charge, showing that blockchain can cut deal closure times by 32.4% and reduce costs by 27.8%. This is a game-changer for anyone looking to buy property, as it means faster and cheaper transactions. Imagine not having to wait weeks for paperwork to clear or paying hefty fees just to finalize a deal.
One of the standout features of blockchain is its ability to create smart contracts and immutable property records. Once a transaction is on the blockchain, it’s there for good, ensuring both transparency and security. PropertyClub, for instance, uses blockchain to verify transaction details, achieving a 21.3% cost reduction while keeping everything transparent. This means you can trust that the information is accurate and tamper-proof.
In Perth, the buzz around blockchain is growing. Over 210 real estate professionals in Western Australia have been trained in this technology, showing a strong willingness to embrace it. This training is part of a collaboration between the Real Estate Institute of Western Australia (REIWA) and TecStack, aimed at integrating blockchain into property transactions. This initiative is setting the stage for a more efficient real estate market in the region.
For potential buyers, this means a more streamlined process with fewer hurdles. Blockchain technology is not just a trend; it’s becoming a vital tool in the real estate industry. With more professionals getting on board, the future of property transactions in Perth looks promising.
Sources: Axis Technical, Wepub, REIWA
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.