PERTH REAL REVIEW

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

Perth Property 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

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.

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:

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

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.

Conditions varied across suburbs, each offering unique appeal for investors and tenants, from suburban units to luxurious coastal homes.

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

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.

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

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.

Whether you’re a first-time investor, managing a growing portfolio, or deciding whether to rent out your home versus selling it, knowing your property’s current rental value is key to unlocking its full potential.

MORE PERTH PROPERTY

Perth’s property market in 2025 continued its meteoric rise, ranking as one of Australia’s top-performing capital cities with over 15% growth, driven by severe undersupply and high demand. The median house price surged toward $1 million, while unit prices also increased significantly, with competition for established homes remaining intense despite some easing in the rental market.

2025 Market Highlights

Price Growth: Perth property values continued to surge, with some reports indicating continued growth following a massive 2024, driven by low inventory.

Key Drivers: Persistent, high population growth combined with a limited supply of new housing kept the market incredibly tight.

Median Prices: By late 2025, median house prices were nearing the $1 million mark, with significant gains in the middle and outer suburbs.

Rental Market: While still tight, the rental market showed signs of a “reset” or slight stabilization compared to the frantic pace of 2024, with more investors entering the market.

Fastest Selling Suburbs: Properties continued to sell quickly, with, for example, Bassendean being a top-performing suburb for quick rental leasing (11 days)

Trends & Observations

Urban Divergence: While suburban, middle, and outer areas experienced strong growth, some inner-city, high-density areas showed signs of slowing.

Investor Activity: Investors were attracted by high yields, with suburbs like Cannington and Spearwood remaining top performers for house and unit yields, respectively.

Buying Activity: The market remained competitive, but some buyers began to feel the pinch of “affordability ceilings” as prices continued to climb.

2025 Rental Market

The rental market continued to experience low vacancy rates, although the pace of rental price growth eased from the extreme levels seen in 2024. The year was marked by a shift toward more professional, compliant property management, with tenants becoming slightly more selective as more housing supply (including investor-owned builds) came online.

2025 Market Performance

By the end of December 2025, Perth’s housing market achieved the following milestones:

Median House Price: Reached $850,000 (according to REIWA) or as high as $983,068 (NAB data), marking an annual growth of roughly 12% to 15.9%.

Median Unit Price: Climbed to $600,000 (REIWA) or $677,722 (NAB), representing a robust annual increase of 18.0% to 19.7%.

Units Outperforming Houses: For the first time in recent years, unit price growth surpassed house price growth as buyers shifted toward more affordable entry points.

Selling Speed: Properties sold at a record-breaking pace, with a median of just 8 to 11 days on the market.

Perth Property Price Growth 2025 (Annual % Change)

Rental Market Highlights

The rental market remained critically tight through 2025, though growth rates began to stabilise toward the end of the year:

Median Rents: House rents ended the year at $700 per week, while unit rents reached $680 per week.

Vacancy Rates: Remained exceptionally low, hovering between 0.7% and 2.2% throughout the year.

Yields: Gross rental yields remained attractive for investors at approximately 3.9% to 4.0% for houses and up to 5.6% for apartments.

Legislative Changes

First Home Guarantee Scheme: From 1 October 2025, the price cap was lifted from $600,000 to $850,000, significantly increasing competition for entry-level homes.

Interest Rate Impact: Three interest rate cuts in 2025 boosted borrowing power, helping sustain demand despite worsening affordability.

Stamp Duty Exemptions: The Duties Amendment Bill 2025 provided full stamp duty exemptions for first-home buyers on homes up to $500,000.

Rental Reforms: 2025 marked the first full year of the Residential Tenancies Amendment Act 2024, which limited rent increases to once per year and banned rent bidding.

LIMITED PROPERTY STOCK

Perth’s property market in December 2025 experienced record-low inventory, with active listings dropping to 1,881 by month-end, a 35.5% decrease from November and a 57.2% decline year-on-year. Despite the festive season, demand remained high, with homes selling in a median of just nine days. The median house price reached $840,000.

2025 Property Market Trends

Inventory Crisis: Total listings plummeted, representing one of the lowest, if not the lowest, levels in recent history, driven by a “logjam” where sellers struggled to find replacement homes.

Fast Sales: Homes sold in a median of 9 days, which was 7 days faster than the same period in 2024, indicating extremely tight market conditions.

Record Prices: By December, the median house price in Perth rose to $840,000, while the median unit price reached $590,000.

Top Performing Suburbs: Suburbs with the fastest sales included Parkwood (3 days), Warnbro (4 days), and Girrawheen, Waikiki, and Dayton (5 days).

Rental Market: The median rent held at $700 per week, with rental supply increasing slightly in late December due to seasonal turnover, rising 24.1% on the week prior.

MORTGAGE STRESS

Perth is experiencing significant mortgage stress, with nearly 40% of Western Australian homeowners struggling with repayments due to rapidly rising interest rates and surging property prices. As of early 2025, over 37% of household income is required for entry-level house repayments, exceeding the 30% mortgage stress threshold.

Key Aspects of Mortgage Stress in Perth (2025-2026)

Widespread Impact: While some areas have lower rates, many Perth homeowners are facing heightened financial pressure.

Drivers: The crisis is driven by an 80% increase in house prices since 2020 and high-interest rates, impacting first-home buyers and existing homeowners.

Areas of Concern: Suburbs like Forrestfield have been identified as having high rates of mortgage arrears.

Support Services: Legal Aid WA offers a Mortgage Hardship Service to help homeowners facing financial difficulties, including a hotline at 1300 650 579.

Outlook: While some indicators suggest a potential for relief via interest rate cuts, the immediate outlook remains challenging, with high demand and low supply continuing to impact affordability.

For those struggling, experts recommend immediate action, such as contacting lenders to explore options like temporary payment reductions.

RBA lifts interest rates by 0.25pc

RBA lifts interest rates by 0.25 per cent, to 3.85 per cent, after inflation rose “materially” in second half of 2025.

POWER GAS WATER

Service costs in Australia have been rising significantly, driven by inflationary pressures, increased operating expenses, and higher labor costs across various sectors. As of late 2025 and early 2026, consumer price inflation (CPI) rose, with services like housing, healthcare, and insurance, as well as specific industry sectors, seeing notable increases.

Here is a breakdown of the current situation regarding service cost increases:

Key Drivers of Rising Service Costs

Inflation: High inflation has driven up the general level of prices for services. For the 12 months to December 2025, CPI rose by 3.8%.

Labour Costs: Shortages in skilled staff have driven up wages, with non-market sectors like health, aged care, and child care experiencing faster wage growth.

Operating Expenses: Businesses are facing higher non-staff costs, including increased fuel, energy, and supply costs, with 57% of businesses experiencing higher costs as of early 2022.

Demand/Supply Imbalance: Strong demand for services (e.g., rental accommodation) combined with limited supply has driven up prices.

Health and Aged Care: Specialist consultation fees have been increasing by 5-6% annually. From 1 November 2025, aged care providers are introducing new “Higher Everyday Living Fees” (HELF) and restructuring services, which will likely lead to higher costs.

Child Care: A new Childcare Services Cost Index (CSCI) was introduced to track rising prices in this sector.

Professional Services: Over half of accounting firms reported plans to raise fees in 2024 to better reflect the value of their work.

Digital Services: Streaming services, such as Apple TV+ and Netflix, have hiked prices in Australia.

Postal Services: Australia Post has proposed price increases to combat rising operating costs.

Price Passing: Roughly 48% of businesses have passed on some or all of their increased costs to customers.

Price Gouging Concerns: While rapid increases (e.g., surge pricing) are not illegal, they have led to high out-of-pocket costs, particularly in services like general practice (GP) visits.

Strategic Responses: Businesses are, in many cases, moving away from “nice to have” pricing and towards higher, value-based, or cost-reflective pricing for services.

Future Outlook

Aged Care Changes: The new “Support at Home” program, starting 1 November 2025, will see providers setting their own prices, with government price caps introduced from 1 July 2026.

Continued Pressure: Economists suggest that strong growth in unit labor costs will continue to exert upward pressure on services inflation.

FOOD & GROCERY

Food and grocery costs in Australia have reached record highs, with staple item prices rising significantly due to supply chain disruptions, climate events, and high inflation, causing average family weekly bills to increase by 11% to over $240. Between 2021 and 2023, food inflation was more than double that of previous decades.

Industry Concentration: Australia has a highly concentrated grocery sector with limited competition, leading to accusations of “price gouging” or “greedflation,” though retailers deny this.

Rising Costs of Goods: Significant price increases have been noted for staples such as grains (10%), milk and dairy (10.7%), and oils (12.2%).

Specific Item Hikes: Egg prices have risen by as much as 49% over the past three years due to avian influenza, while fruit and vegetable prices remain volatile.

Higher Household Spend: A family’s weekly shop has increased from $216 to $240, adding nearly $3,000 annually in costs compared to 2021.

Persistent High Prices: Despite easing inflation in some areas, the overall level of prices remains high, with many items failing to drop in price.

Consumer Behaviour Shifts: Australians are increasingly shopping at different, often cheaper, stores, and searching for specials to manage costs.

Continued Pressure: Prices for items like eggs (12.1% increase to Oct ’24) and fruit (12.3%) remain high, although staples like bread saw smaller increases (3%).

Limited Impact of Inquiries: Government and Senate pressure on supermarket chains has not yet resulted in significant reductions in grocery costs.

Profitability: Major supermarkets have continued to report high profits, often over A$1 billion, amidst rising costs for consumers.

AVERAGE INCOME

In Western Australia, the average weekly earnings for all employees were around $1,710.40 (as of May 2025), while full-time workers earned significantly more, with average weekly earnings around $2,155 (private sector) to $2,165 (full-time) as of late 2025, leading the nation in some measures. Median individual weekly incomes from the 2021 Census were lower, at $848, but reflect broader data including part-time workers.

Key Figures (Latest Available Data):

Average Weekly Total Cash Earnings (All Employees): $1,710.40 (May 2025).

Average Weekly Full-Time Earnings (Private Sector): ~$2,165 (Late 2025).

Average Weekly Full-Time Earnings (Public Sector): ~$2,112 (Late 2025).

Median Weekly Individual Income: $848 (2021 Census).

Trends

Leading in Earnings: WA consistently shows higher average earnings compared to other Australian states, often attributed to its strong resources sector.

Full-Time vs. All Employees: The figures for full-time workers are much higher than the overall average because they exclude part-time and casual earnings, as shown in the ABS data.

Median vs. Mean: The median (the middle value) provides a different picture from the average (mean), with the median often lower as it includes lower-earning individuals, notes the Australian Bureau of Statistics.

For the most current detailed breakdowns, including gender and specific sectors, refer to the Australian Bureau of Statistics (ABS) and the WA Government releases.

INCOME INREASES

The Fair Work Commission has announced a 3.5% increase to the National Minimum Wage and all award wages, effective from the first full pay period on or after 1 July 2025. This brings the new national minimum to $948 per week or $24.95 per hour. The 3.5% increase applies to minimum rates for employees covered by the Fair Work Act.

Key Details for 2025–2026

Effective Date: 1 July 2025.

Increase Percentage: 3.5% for minimum wages and award rates.

New Minimum Wage: $948.00 per 38-hour week or $24.95 per hour.

Scope: Affects nearly 2.9 million workers on award rates.

2026 Outlook: Projections suggest pay hikes may hold steady around 3.5% for 2026.

ACTU Position: The ACTU is pushing for higher “above-inflation” pay increases in 2026 due to cost-of-living pressures, particularly housing.

For many employees, particularly in Western Australia, this 3.5% increase applies to the state’s minimum wage and award rates from 1 July 2025. The increase ensures that wage growth aims to keep pace with economic conditions.

PETROL COSTS

Based on reports from early 2026 and forecasts for 2025-2026, petrol prices in Australia have experienced significant fluctuations with a general trend of volatility, alongside scheduled tax increases.

FUEL TRENDS

Perth Market Volatility (2025-2026): Data from FuelWatch in 2025 and early 2026 shows regular, sharp price hikes. For example, in June 2025, prices increased by 34 cents per litre (cpl) in a single day, and in November 2025, a 21 cpl hike was reported.

Early 2026 Trends: As of early February 2026, some reports indicated price drops in certain areas, but overall, the market continues to see sharp weekly price cycles.

Fuel Excise and Tax: The Australian Taxation Office indicated that fuel tax credit rates, which reflect road user charges, were set to increase from 30.5 cpl (2024-25) to 32.4 cpl (2025-26).

General Market Factors: Despite some downward pressure from lower global crude oil prices in late 2025, local retail prices in Australia were still subject to high volatility.

Regional Specifics (Perth & Mandurah)

2025 Highs: Throughout 2025, average prices in Perth often jumped to over 190–200 cpl during weekly, mid-week peaks.

2026 Start: In February 2026, FuelWatch reported that average prices in Perth were set to rise by 20 cpl to 178.2 cpl, with some retailers hiking to over 200 cpl.

DRIVERS TIPS

Fill-up Cycles: Perth and Mandurah drivers are consistently advised to fill up on “cheap days” (usually Monday/Tuesday) to avoid 20–30+ cpl hikes on Wednesdays.

Price Differences: Significant savings (often over $30 per tank) can be made by using fuel-tracking apps and choosing cheaper, independent stations rather than the most expensive options.

It is highly recommended to check local fuel price reporting services (like FuelWatch in WA or similar services in other states) for real-time, daily price fluctuations.

TRADE SERVICES

Tradesman and maintenance costs in Australia are projected to remain high and continue rising through 2025 and 2026, driven by persistent labour shortages, high material costs, and a, high-volume construction pipeline. While the pace of increases may slightly ease from the peak of 2023–2024, costs are forecast to rise by approximately 4% to 6% per annum through 2026.

Key Trends and Cost Drivers (2025–2026)

Persistent Inflation: National building cost escalation is expected to hover around 5.2% for building and 5.0% for infrastructure in 2026.

LABOUR SHORTAGE

Labour Shortages: Skilled labor remains the primary driver of cost increases, with project completion times for houses and apartments remaining about 40% higher than pre-pandemic levels.

Key Trades Costs: Plumbing, electrical, and other specialized trades are facing significant pressure due to high demand, with hourly rates for services like plumbing in 2025–2026 sitting between $80–$200 per hour, plus call-out fees.

Material Costs: While some materials have stabilized, overall input costs are still rising, partly due to energy price volatility.

REGIONAL

Regional Variations: Brisbane is expected to lead in cost increases, while Perth faces a, prolonged, “construction bottleneck” with costs expected to rise by 5%–5.75% in 2025–2026, with little relief expected until 2028.

MAINTENANCE

Maintenance costs are set to rise, with a projected 17% increase by 2029.

Repair and maintenance (R&M) output is expected to slow in the short term but pick up again in 2026, with a forecasted 10% growth in R&M output between 2025 and 2030.

Labor costs and increased compliance requirements are driving up maintenance,, repairs, and cleaning fees.

OUTLOOK

The high volume of work, including infrastructure, defence, and energy projects, will continue to strain resources and inflate prices through 2026.

As a result of the rising costs, homeowners are advised to update their building insurance valuations to avoid being underinsured.

Small and medium builders are particularly vulnerable to financial pressure from these, persistent, high costs.

Be cautious when buying with a 10 year plan as the real estate cycle is at its peak & will rollacoaster then return stronger tha before at the end of the decade.