The Perth Property Market: Wrapping Up 2024 and What Lies Ahead

As we move through 2025, Perth’s property market continues to demonstrate resilience, confidence and strong growth fundamentals. Despite economic shifts and ongoing global challenges, demand for premium homes remains high, with significant sales exceeding $7 million still occurring in City Beach, Peppermint Grove, Mosman Park and Cottesloe.

Perth’s median house price grew to $745,000 by December 2024, and REIWA predicts a further 10% increase in 2025. More specifically in the Western Suburbs, Wembley recorded the highest growth with 18% increase in median value to $1,723,652 and was also the most sought-after suburb with an average of 98 buyer enquiries per listing. Peppermint Grove maintained the title of most expensive suburb, with the median house price of $4,228,655.

Towards the end of last year we saw the heat came out of the market, buyer sentiment changed from the manic FOMO (Fear Of Missing Out) to relax slightly as stock levels rose, providing choice and time for buyers to take their time finding the right property. This is reflected in the current stats with REIWA reporting that there are 4,790 properties on the market, which is close to a thousand more than the same week last year. This trend started around September last year where the stock levels were increasing faster than they were being sold. This year has started differently, the sales rate is higher – with last weeks statistics showing there were 865 sales, which is over 100 more than the same week last year. Internally we are seeing increased buyer interest which is unusual over the holiday period. It definitely feels like the sentiment has changed again. And although figures show that stock levels and days on market have slightly increased, this has not dampened buyer sentiment, it is still a strong sellers market.

A strong WA economy—now the nation’s best-performing—combined with rapid population growth of 2.8%, continues to fuel housing demand.

The elections this year do not appear to be impacting the market, and with interest rate cuts expected mid-year, buyer confidence is likely to strengthen further. Meanwhile, construction trends remain a key factor. The cost to build a home in Australia has surged to an average of $550,000—a 47% increase since 2020. Fortunately, building costs do appear to be stabilising though, with last year seeing a 6.7% increase which is in line with the 10 year average.

While the number of dwellings under construction remains at elevated levels of 22,910, the construction industry has been able to increase the number of completions with 19,089 new homes completed in the 12 months to September 2024. The high construction costs and skilled labour shortages are still contributing to future supply constraints.

The low Australian dollar – while not great for holidays and online shopping – is great for exports especially with our resources industry. This helped add a buffer to the commodities whose prices have softened and added extra margin to those like gold at record prices. The low Aussie dollar is also appealing to expats and international investors, who see Australian property ‘on sale’ with the currency conversion.

With these factors in play, 2025 presents a unique landscape for buyers, sellers, and investors. The fundamentals remain strong, and Perth’s market is well-positioned for continued upward momentum. I’ll be exploring these themes in more detail over the coming weeks.

 

Justin Davies
CEO & Founder