Perth property growth. Perth’s property prices have reached historic heights, climbing more than 80% since the 2020 COVID outbreak. The city’s median property price has now surpassed Melbourne’s for the first time in ten years. This upward trend looks set to continue through 2025, which creates new opportunities for investors and homeowners.
The market shows strong momentum. June saw house values climb by 0.8%, pushing the median house price to $855,395. Perth’s unit market also performs remarkably well, with prices rising 0.7% monthly and 11.3% yearly. These numbers point to a fundamental change in the city’s real estate market.
Recent quarterly data backs up this growth story. The median house sale price jumped 2.7% in the March quarter to $770,000. Unit prices also made gains, with the median price reaching $520,000 – up 4% from $500,000 at the end of 2024. The market looks on track to achieve 10% growth throughout 2025.
The premium segment has seen dramatic changes, with twenty-seven new suburbs joining Perth’s million-dollar club in 2024-25. Yet beneath these impressive numbers lie important trends that many experts overlook. Let me share the untold story of Perth’s property growth and what it means for your investment choices in 2025.
The surprising strength of the Perth property market in 2025
Perth has become the star performer in Australia’s property scene. The city’s property growth continues at an amazing pace and outshines all other capital cities in early 2025.
Why Perth is outperforming other capitals
Several factors work together to drive Perth’s extraordinary property growth. The state now has Australia’s strongest job market and highest population growth at 2.82%. Western Australia leads the country in net migration as people’s attention is drawn to job opportunities and lifestyle benefits. Building approvals stay below decade-average levels, which creates an ongoing supply-demand imbalance that propels price increases.
Latest median price data and growth rates
Recent numbers show Perth’s impressive property growth path. House values grew by 0.8% in June, up 2.1% quarterly and 6.5% over the 2024/2025 financial year. The median house price has reached a record AUD 1,307,890.60. Unit prices have performed better still, rising 0.7% monthly and 11.3% annually. REIWA forecasts suggest Perth’s property growth will hit 10% in 2025, and unit prices might go even higher.
Perth has now passed Melbourne in median home values for the first time in over ten years. This milestone shows the city’s dramatic rise in Australia’s property rankings.
How affordability is shifting in the city
Strong property growth hasn’t stopped Perth from offering better value than eastern capitals. Affordability metrics are changing faster now. The gap between median house prices and incomes grows wider. Perth now has Australia’s worst rental affordability, as people need 31% of their income for average rents. The Home Guarantee Scheme price cap (AUD 917,394.14) sits AUD 305,798.05 below the median house value. While property growth has created wealth for existing owners, new buyers face bigger challenges.
Hidden trends in house and unit performance
Perth’s property market shows a remarkable change. The unit market now leads house prices in growth rates. This creates fresh opportunities for smart investors.
Unit prices outpacing houses: what’s behind the change?
Perth’s property market has reached a pivotal moment. REIWA projects unit growth at 15% through 2025, which is a big deal as it means that the 10% predicted for houses. Affordability pressures drive this reversal. The median house price hit a record AUD 1,201,786.32 with a 1.4% rise in the June quarter. This pushed many buyers toward more available unit options.
The median unit price climbed to AUD 825,654.73 after a 2.9% jump in the June quarter. This marks a fundamental change since unit prices grew slower than houses in Perth until recently.
The role of investor demand in unit growth
Investors propel development in Perth’s unit sector as their attention is drawn to strong yields. Units now deliver a 6.2% rental yield, which towers above the 4.5% return on houses. The yield gap has grown substantially – just five years ago, the difference was only 0.4 percentage points.
Each unit type performs differently. Villas lead the pack with prices jumping 25.6% over 12 months and 69.2% since 2020. Home units follow close behind with 22.1% annual growth. Apartments show the lowest long-term growth at 14.1%.
Why houses are still holding strong in some suburbs
Houses remain crucial to Perth’s property growth in certain areas despite the unit surge. The best-performing house suburbs saw yearly growth above 28%, especially in affordable areas. Camillo topped the list with a 45.7% house price increase, and Armadale followed at 44.4%.
Buyers show clear priorities rather than moving away from houses completely. REIWA president Suzanne Brown notes, “People like villas and townhouses; people often prefer to have their own courtyard and a garage next to their home”. This desire for low-density living helps maintain house values even as the broader unit trend continues.
Supply, demand and the listings puzzle
The driving force behind Perth’s property growth comes from a unique supply-demand imbalance. This tension shapes market dynamics in properties of all types across the suburbs.
Stock levels rising but still tight
Property listings have gone up but remain too low to support balanced Perth property growth. Active listings reached 4,351 in May 2025, showing a 32.9% increase from last year. In spite of that, these numbers are nowhere near the 13,500 listings the market needs for balance. REIWA data shows property listings moved between 3,000-5,000 throughout 2024. This shortage keeps pushing Perth’s property growth despite recent increases.
Days on market: what it reveals about buyer urgency
Properties continue to sell quickly, which shows strong momentum in Perth’s property growth. Perth houses sold within 13 days during May – one day faster than April but four days slower than May 2024. Units took 14 days to sell. Perth leads the nation with the lowest Days on Market at just 16 days. Harrisdale stands out as the fastest-selling suburb where houses sell in just six days.
Building approvals and the Housing Accord shortfall
There’s another reason powering Perth’s property growth – construction shortfalls. Master Builders expects only 114,620 new home starts in WA until June 2029, which falls 15,000 homes short of the state’s Housing Accord target. This undersupply mainly stems from workforce shortages and productivity problems. The national picture looks similar, with just 177,000 dwellings completed in 2024 against a demand of 223,000.
How low vacancy rates are shaping the market
The rental sector adds fuel to Perth’s property growth through ongoing undersupply. Perth’s rental vacancy rate sits at 1.6%, which shows improvement but stays below the balanced range of 2.5-3.5%. This shortage pushes rents higher, with experts predicting 5-7% increases for 2025. Many renters now look to buy homes instead, which adds more momentum to Perth’s property growth.
What experts aren’t saying (but the data shows)
Perth’s property growth story runs deeper than most people realise, with many experts staying quiet about its complexity.
Suburbs at risk of overvaluation
Several Perth suburbs raise red flags when we look at their price-to-income ratios. Cottesloe, Dalkeith, and City Beach show clear signs of overvaluation. Their prices have jumped more than 35% while income growth stays at a modest 4.2%.
The impact of East Coast investor pullback
Recent numbers show East Coast investors have scaled back their Perth purchases by 17.3% this quarter. Their share of investor purchases dropped from 31% to 23.7%. Yet Perth’s property market keeps growing steadily.
Why regional WA is quietly booming
Regional WA’s performance outshines Perth’s impressive growth. Busselton leads the pack with an 18.3% yearly increase. Dunsborough follows at 16.7% and Margaret River at 15.9%. These areas draw buyers who want a lifestyle upgrade without city prices.
Interest rate forecasts and their hidden influence
Bank experts see two rate cuts coming before the year ends, which could speed up Perth’s property growth. A small 0.5% rate drop would boost borrowing power by 11%, helping more buyers enter the market.
How global economic shifts could ripple into Perth
World events quietly shape Perth’s property landscape. China’s economic slowdown threatens resource demand, but growing Middle Eastern investment helps balance things out with a 22% yearly increase. Perth’s housing affordability compared to other markets should keep drawing overseas buyers through 2025.
Conclusion
Perth’s property boom has revolutionised the city’s real estate world. The remarkable surge proves Western Australia’s economic strength and lifestyle appeal. Property values continue to outperform all other Australian capitals. This creates wealth for existing homeowners but makes life harder for new buyers.
Numbers tell the story clearly. The median house price has jumped to $855,395. Units have done even better with 11.3% yearly growth, showing a major market change. New buyers struggle more as the gap grows between property prices and what people earn.
Limited supply drives these price increases. Construction delays and record-low vacancy rates stimulate Perth’s growth despite more properties being listed. Houses sell quickly, taking just 13 days on average to find buyers.
Some interesting patterns have emerged lately. Unit prices now grow faster than houses for the first time in years. People choose cheaper options because houses cost too much. The growth spreads beyond the city, with areas like Busselton and Margaret River seeing strong gains.
Smart investors should watch for warning signs during this boom. Some suburbs show signs of overpricing as price-to-income ratios reach worrying levels. The market might face challenges from interest rate changes and worldwide economic shifts soon.
Perth property growth story brings both chances and risks. Clever investors look past the headlines to find areas with lasting growth potential. People who spot these hidden trends will benefit most from Perth’s amazing real estate changes. The city has become Australia’s new property powerhouse that will lead through 2025 and beyond.
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FAQs
Q1. What is the projected growth for Perth’s property market in 2025? Perth’s property market is expected to see continued growth in 2025, with house prices forecasted to rise by 5.2%. This follows a strong 10.2% increase in 2024, indicating a sustained upward trend in the market.
Q2. Which Perth suburbs are considered promising for investment in 2025? Several suburbs show potential for investment in 2025. Scarborough offers beachside appeal, Victoria Park is gentrifying with good transport links, Joondalup is a growing employment hub, and Fremantle continues to attract strong buyer and investor interest due to its cultural significance.
Q3. How are unit prices performing compared to houses in Perth? Unit prices in Perth are outpacing house prices for the first time in years. The Real Estate Institute of Western Australia (REIWA) forecasts 15% growth for units through 2025, significantly exceeding the 10% predicted for houses. This shift is largely due to affordability pressures in the housing market.
Q4. What factors are driving Perth’s property market growth? Perth’s property growth is fueled by several factors, including the strongest job market and highest population growth nationwide, leading net migration, and building approvals remaining below decade-average levels. This combination has created a persistent supply-demand imbalance, driving up prices.
Q5. How is affordability changing in Perth’s property market? Despite strong growth, Perth still offers relative value compared to eastern capitals. However, affordability is rapidly changing. The gap between median house prices and incomes is widening, and rental affordability in Perth is currently the worst in Australia, requiring 31% of income to service average rents. This presents growing challenges for new market entrants.