The Perth property market is continuously evolving, influenced by key economic drivers such as interest rates, inflation, migration trends, and government policies. As we move into 2025, investors, homebuyers, and property analysts are closely watching the latest developments in Perth’s real estate landscape.

In this article, we will explore the major trends shaping the Perth property market in 2025, offering a data-driven and forward-looking analysis to help Australians make informed real estate decisions. We will also compare Perth’s market with Melbourne’s to provide a broader national context, highlighting how these two markets differ in affordability, growth potential, and investment appeal.

Overview of the Perth Property Market in 2025

The Perth property market has demonstrated remarkable resilience in recent years. In 2024, Perth’s median house price increased by 24.2%, reaching $745,000 by December. Meanwhile, unit prices rose by 21.4% to $500,000. This strong growth has positioned Perth as one of Australia’s fastest-growing real estate markets.

Despite these gains, Perth remains one of the most affordable capital cities in Australia. Compared to Sydney and Melbourne, where housing affordability has been a persistent challenge, Perth continues to attract buyers seeking better value for money. Additionally, infrastructure projects, lifestyle appeal, and regional growth contribute to the increasing demand for property in the city.

Key Property Market Trends in Perth for 2025

1. Price Growth & Emerging Suburb Hotspots

Perth’s property prices are expected to continue rising in 2025, with forecasts predicting growth of up to 10%. Several suburbs are emerging as hotspots for capital growth, including:

• Scarborough – Recorded a 2.7% price increase in January 2025, with strong demand for beachfront properties.
• Baldivis – A growing suburb attracting first-home buyers due to its affordability and family-friendly environment.
• Joondalup – Benefiting from expanding infrastructure, making it a prime location for investors and homeowners.
• Rockingham – Coastal appeal and increasing development projects continue to drive demand.
• Ellenbrook – A suburb gaining popularity due to its connectivity improvements and planned commercial growth.
• Armadale – Attracting budget-conscious buyers looking for affordable entry points in the market.

2. Buyer Demographics & Migration Trends

Perth’s market has seen a diverse range of buyers, including:

• First-home buyers – Taking advantage of government incentives and the relative affordability of homes.
• Interstate migrants – Moving from high-priced markets like Sydney and Melbourne for better lifestyle opportunities.
• Investors – Recognising Perth as a strong rental market with high yields and growing demand.
• Expats returning to Australia – Many Australians who worked abroad during the pandemic are choosing to settle in Perth due to its work-life balance and property affordability.

Net migration to Western Australia has remained strong, with many Australians relocating for job opportunities in mining, construction, and healthcare sectors. This trend is expected to sustain housing demand in 2025.

3. Rental Market Insights

Perth’s rental market continues to tighten, with vacancy rates remaining at historically low levels. As of early 2025:

• Median rent for houses – Increased to $670 per week, reflecting an 8.9% annual rise.
• Rental yields – Remain attractive for investors, with some suburbs achieving yields above 5%.
• Supply constraints – A limited number of new rental properties entering the market, keeping pressure on rents.
• Build-to-rent developments increasing – More large-scale investors are turning to the build-to-rent model to provide much-needed rental stock and long-term leasing opportunities.

4. New Housing Developments & Infrastructure Projects

Ongoing infrastructure projects play a critical role in shaping Perth’s property market. Key developments include:

• Metronet Expansion – Enhancing connectivity across Perth suburbs and driving property demand in newly connected areas.
• Perth City Deal – A $1.5 billion investment aimed at revitalising the city’s commercial and residential landscape.
• Westport Project – A long-term development plan expected to increase employment opportunities and boost property values in surrounding areas.
• Airport Rail Link – Improving accessibility to and from Perth Airport, benefiting suburbs near the rail corridor.
• New master-planned communities – Areas like Alkimos and Byford are seeing new developments catering to families and first-home buyers.

Despite these initiatives, challenges such as slow land releases and construction delays have limited new housing supply, further driving up prices.

5. Government Policies & Interest Rates

Government policies and interest rate movements will play a crucial role in shaping the Perth property market in 2025.

• Interest rate cuts expected – Forecasts suggest that the Reserve Bank of Australia (RBA) may lower rates, making borrowing more accessible and boosting buyer confidence.
• Government incentives – First-home buyer grants and stamp duty concessions continue to support entry-level buyers.
• Tax implications for investors – Recent policy discussions on negative gearing and capital gains tax could influence investor behavior.
• Short-term rental regulations tightening – New Airbnb restrictions may push investors toward long-term rentals, impacting rental supply and pricing.

Perth vs. Melbourne Property Market: A Comparative Analysis

Affordability & Investment Appeal

• Perth – More affordable, with a median house price of $745,000, compared to Melbourne’s $920,000.
• Melbourne – Higher property taxes and increased housing supply have dampened price growth.
• Perth’s rental yields – Higher compared to Melbourne, making it more attractive for investors.

Supply & Demand Trends

• Perth – Facing a housing supply shortage, pushing property prices and rents higher.
• Melbourne – Increased property listings and slow demand growth have kept price appreciation low.

Why Investors Are Choosing Perth Over Melbourne

Many investors are shifting their focus from Melbourne to Perth due to:

• Better affordability – Lower property prices mean lower entry costs and higher potential for capital growth.
• Stronger rental yields – Higher rental demand and limited supply make Perth an attractive option for passive income.
• Economic strength – Perth’s economy, supported by mining and infrastructure projects, offers stability and job growth.
• Lower land taxes and investor-friendly policies – Making Perth more appealing to property investors.

Expert Insights & Predictions for the Rest of 2025

Property analysts and economists remain optimistic about Perth’s real estate market. REIWA forecasts a 5-10% increase in median house and unit prices by the end of 2025. Industry experts suggest that anticipated interest rate cuts could further boost demand, leading to sustained property price growth.

SQM Research indicates that Perth has the potential to lead the nation in price increases, given its affordability and strong migration trends. Investors are advised to monitor economic indicators and interest rate movements to capitalise on emerging opportunities.

Perth’s property market in 2025 presents exciting opportunities for homebuyers and investors. Key takeaways include:

• Price growth remains strong, with some suburbs showing significant appreciation.
• The rental market is thriving, offering high yields and sustained demand.
• Government policies and interest rates will shape future property trends.
• Perth vs. Melbourne comparison highlights Perth’s affordability and investment potential.

With continued demand and limited housing supply, Perth is positioned as one of Australia’s most promising real estate markets. For those looking to invest or purchase a home in Perth, seeking expert guidance is crucial.

Looking to invest in Perth’s booming property market? Contact Rise Property Buyers today for expert insights and tailored property investment strategies.