Perth Property Market: 2025 Year in Review
The Perth property market in 2025 was truly remarkable in its shifts and trends.
House prices showed steady growth, with demand remaining strong despite concerns over an “affordability ceiling.” Legislative changes also played a role, further regulating landlord-tenant relationships.
Population growth and new laws shaped the broader market environment, but it was the rental sector that stood out the most. Competition for a limited supply of properties remained intense, resulting in a tight market for tenants.
In the sales sector, steady price growth provided opportunities for those who approached the market with strategy and patience. Many suburbs reached the million-dollar club, offering a silver lining for informed buyers and investors.
Here’s our full recap of the Perth property market in 2025.
Perth Property Market Overview
Perth’s property market has experienced the most significant growth in housing values over the past five years, with 83.9% capital gains up to September, according to Cotality’s Housing Affordability Report.
Despite this boom, Cotality classifies Perth as “middle of the pack” in terms of affordability.
That is because it ranked fourth place among the eight capitals, and its house value was $830,000 by November, compared to the national median dwelling value of $872,500. The market has absorbed this growth well, leaving room for more growth.
About this, Westpac stated that “Perth, which chalked up extraordinary price growth of 18.4% in 2024, will moderate to 8% this year and in 2026.”
Despite the easing growth rate, the future of Perth’s property market remains promising. This growth has been supported by a low mortgage-to-income ratio, government incentives, population growth, and a housing shortage.
Speaking of population growth, according to ABC News, Western Australia’s population has surpassed 3 million for the first time, making it the fastest-growing in the country.
In response, only 22,602 new homes were built in WA in the 2024–25 financial year, which is nowhere near enough to contain this population growth.
As for the implications of this supply and demand imbalance, REIWA President Suzanne Brown says, “Until there is a substantial increase in the number of new homes built and completed, we expect buyer demand to remain strong and supply to remain constrained.”
Investors can therefore expect mild, steady growth in Perth, unless there is a significant increase in housing supply.
Perth Rental Market in Focus
Dynamic as always, the Perth rental property market in 2025 continued to deliver solid and steady rental gains by self-moderating. Here are the top trends:
Fluctuations in Vacancy Rates
The vacancy rate, which measures the balance between supply and demand, ideally falls between 2.5% and 3.5%. Perth last reached 2.5% in September 2019, before dropping below 1% during the COVID-19 rent crisis.
In 2025, Perth’s vacancy rate rose from 1.9% in October 2024 to 2.5% in March, its highest level since the COVID-19 pandemic, as high-paying buyers became more selective about premium properties.
However, the rate later eased to 2.2% by October 2025, reflecting the market’s self-moderating nature. This absorption of new supply, while maintaining overall growth, signalled strong rental demand and was positive for investors.
Slow and Steady Rent Growth
Rental prices in Perth grew steadily but at a slower pace. Over the year, median weekly rents for houses increased from $650 to $700, and for units from $620 to $670, representing a 5.6% annual growth rate. That is slower than the over 15% growth seen in 2022.
This moderated growth eased affordability pressures while still outpacing inflation, even though the Consumer Price Index (CPI) of 3.8%, essentially a marker of inflation, is above the RBA’s target range of 2% to 3%.
Opportunities for Landlords
Perth’s rental market in 2025 provided a solid outlook for landlords. Sustained tenant demand and limited supply improved investor confidence, while affordable suburbs and properties (particularly units) offered attractive entry points and strong potential rental yields.
Legislative Impacts: WA Rental Reforms
Government incentives have continued to support market growth.
The Home Guarantee Scheme (HGS) is a key example, enabling first home buyers to enter the market without paying lenders mortgage insurance (LMI), requiring only a 5% deposit. In 2025, the Federal Government accelerated access to this scheme, allowing first home buyers to use 5% deposits from 1 October 2025, earlier than originally scheduled (in 2026).
Other reforms included an increase in the property price cap to reflect median house price growth, providing buyers with more options, as well as broader financing choices through smaller, customer-owned, and regional banks.
The Duties Amendment Bill 2025 further supported first home buyers by exempting duty on homes up to $500,000 and land up to $350,000, while reducing duty for properties priced between $500,000 and $700,000 and land between $350,000 and $450,000.
2025 was also the first full year in which the Residential Tenancies Amendment Act 2024 was implemented. Key measures included:
- Limiting rent increases to once per year, providing predictable income for landlords and stability for tenants.
- Banning rent bidding, reducing pressure on tenants to offer more than the advertised rent and promoting fairness.
- Allowing pets and minor modifications in rental properties (governed by the Commissioner), expanding the tenant pool while giving landlords the ability to set reasonable conditions.
These reforms collectively supported market accessibility, fairness, and stability for both tenants and property owners.
Sales Market Highlights: A Year of Growth and Resilience
The sales market in Perth made headlines throughout 2025 as demand held up despite economic pressures. Below are the main highlights:
Perth as a High-Priced Market
Sales prices rose across both houses and units, with many suburbs entering the Million-dollar club. Perth has experienced “the biggest decline in housing affordability” over the past five years, reinforcing its status as a high-priced market.
Over the year, median house prices increased from $741,000 to $830,000, while median unit prices rose from $495,000 to $580,000.
Affordability Driving Growth
For years now, lower-priced homes have consistently outperformed high-end properties across most capitals, as buyers gravitate toward attainable entry points; a trend that is particularly evident in Perth.
Ms Brown noted that “over the year, unit sale price growth has outpaced growth in houses.”
Many buyers and investors are choosing apartments, townhouses, and units over houses, often focusing on outer suburbs where prices are lower.
Suburbs That Stood Out in 2025
Conditions varied across suburbs, each offering unique appeal for investors and tenants, from suburban units to luxurious coastal homes.
High-Demand Suburbs for Renters
Ms Brown notes that, “the increased opportunities and negotiating power may not necessarily be in areas that tenants want to live.” According to Cotality’s latest quarterly report, tenants were most willing to pay for rentals in Dalkeith, Cottesloe, Swanbourne, and City Beach, all inner Perth suburbs.
Ms Brown provides an explanation for this by saying, “WA’s economy remains strong. The job market is steady, and people continue to want to live and work in areas close to the CBD and key lifestyle attractions. Living close to the convenience of the city, and reduce travel times, remain a factor for buyers and renters alike.”
Sales Market Star Performers
The highest buyer demand was experienced in outer suburbs, with Serpentine, Bedfordale, Gidgegannup, Parkerville, and Gooseberry Hill outperforming, based on Domain’s End of Year Wrap. These semi-rural areas highlight a preference for lifestyle features, such as waterfronts and pools, over purely practical amenities.
For first-home buyers, Ms Brown points to inner suburbs like Maylands and Victoria Park. She recommends units, townhouses, and apartments in these areas, as they remain “well below first home buyer thresholds” while offering access to utilities, employment, and schools.
Looking Ahead: Predictions for 2026
As 2025 concludes, Perth’s property market remains a focal point for investors, buyers, and renters. Below are the highlights for the 2026 projected trends. Read the full predictions here.
Strong Rental Yields
Limited supply is projected to increase demand, which, in turn, will result in strong rental growth, as elaborated below.
New stock is not enough to accommodate the growing population, as the current low vacancy rate of 2.2% makes clear. Coupled with conversion lags, workforce limitations, and rising construction costs, this housing shortage is expected to persist in 2026 and further fuel demand for both owned properties and rentals.
According to REIWA predictions, Perth’s median weekly rent will average $700 for houses and $675 for units, a 5% increase over the year. While solid, this growth is slower than the 8.1% recorded in the previous year, suggesting rental conditions will remain tight but manageable for tenants.
Slower Price Growth
House and unit prices are expected to continue rising, albeit at a slower pace. Westpac projects an 8% growth rate for this year and the next, considerably lower than the 18.4% surge seen in 2024.
As mentioned earlier, units have competed with houses in terms of price growth. This trend is expected to remain strong due to relative affordability, although this will likely drive unit prices higher over time, gradually narrowing their price advantage compared with houses.
Sustainable Demand
One phenomenon that had previously caused unrest is the approaching “affordability ceiling”. Affordability in Perth may be very stretched, but its impact on the supply-demand balance was not as strong as expected.
Similarly, stretched affordability is unlikely to deter many investors in 2026. Reasons for that include the low mortgage-to-income ratio, relative affordability compared to other capital cities, and government incentives that support buyers. Overall, there is considerable scope for growth in 2026.
Final Thoughts
The Perth property market demonstrated resilience throughout 2025, solidifying its status as a high-priced market. Despite stretched affordability, steady growth persisted, attracting investors, buyers, and tenants alike.
Growth was particularly strong in Inner Perth, near the CBD and key amenities, with Dalkeith emerging as the most expensive rental suburb. Buyers, meanwhile, often prioritised lifestyle over practicality, favouring semi-rural areas such as Serpentine.
While both house and unit values increased, units experienced stronger growth, reflecting a broader trend in which affordability drives demand. This dynamic has created a tight market for tenants and first-home buyers, particularly in Inner Perth. Legislative changes and government incentives, however, are helping to ease some market pressures.
Looking ahead, Perth’s property market will depend on addressing the housing shortage, managing affordability, and balancing tenant protections with support for private property investment.
Find out more in our Perth Property Market Predictions for 2026.
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