Will Perth Property Prices Rise in 2025? – Yes

Perth’s property market is poised for growth in 2025, with expectations of a 10 to 12 per cent increase in house prices. However, this growth comes with a warning: the market is transitioning from fair value to overvalued territory, suggesting that buyers and investors should tread carefully.

The Current Market

Currently, Perth offers fair value for properties, but the rapid price growth could lead to overvaluation. This upward trajectory is a continuation of the momentum seen in recent years. However, such growth often leads to a correction or stagnation in the future.

What Lies Ahead

While 2025 is expected to see significant growth, the back end of this period may bring a flat phase. This isn’t predicted to be a sharp bust but rather a real-term decline of 10 to 20 per cent over time. The emotional cycle of the market—characterized by the fear of missing out, paying above asking price, and rushing to secure a property at any cost—has already passed. Buyers are now approaching the market with more caution.

Suburbs with Strongest Growth Potential

The middle-ring suburbs of Perth, where properties are priced between $1 million and $2 million, are likely to see the strongest growth in the coming years. This segment could benefit significantly if interest rates fall, as lower rates increase borrowing capacity, particularly for those looking to trade up.

Is Now a Good Time to Buy?

The Perth market is experiencing an end-of-cycle, tearaway boom, outperforming many other parts of Australia. However, prospective buyers should consider the lessons of 2008, when Perth’s housing prices were among the highest in the country, alongside Sydney. This historical context underscores the importance of buying wisely.

Caution for Buyers

Value-for-money properties are becoming increasingly scarce. A recent search in the $700,000 to $750,000 range revealed only 22 properties that represented good value for money—a stark contrast to three years ago when 900 such properties could be found. This highlights the need for diligence and strategic decision-making when entering the market.

Conclusion

Perth’s property market in 2025 presents opportunities for growth but also challenges for those unprepared. While there’s potential for significant price appreciation, overvaluation and potential corrections make careful planning essential. By focusing on value-for-money properties and understanding market dynamics, buyers can navigate this evolving landscape effectively.

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Selling your home is not just a transaction; it’s a significant milestone in your life, and we are dedicated to empowering you throughout this journey. Our commitment to your success drives us to provide practical tips and strategies that can help you maximize your property’s selling price.

Enhance Curb Appeal:

First impressions matter! Invest in landscaping, a fresh coat of paint, and minor repairs to make your home more inviting. Potential buyers are more likely to be attracted to a well-maintained exterior.

Stage Your Home:

Consider staging your home to showcase its best features. This can involve rearranging furniture, decluttering spaces, or even hiring a professional stager. A well-staged home allows buyers to envision themselves living in the space.

Set the Right Price:

Pricing your home correctly from the start is crucial. Our team at My Home Value can provide you with a comprehensive market analysis to help you determine a competitive price that reflects your home’s value while attracting potential buyers.

Market Strategically:

Utilize multiple platforms to market your home effectively. High-quality photos, engaging descriptions, and comprehensive listings on popular real estate websites can help you reach a wider audience.

Negotiate Wisely:

Be prepared to negotiate offers. Understanding your priorities and having a clear financial strategy can help you navigate offers confidently. Our personalized financial guidance can support you in making informed decisions.

We have a track record of helping clients achieve their financial goals. For instance, one of our clients recently sold their home for $50K above the asking price after implementing our tailored strategies. Their success story is a testament to the effective practices we advocate.

We invite you to reach out for a personalized consultation. Our team is here to build a strong relationship with you and provide tailored advice that aligns with your unique circumstances. Together, we can navigate the home-selling process to ensure you achieve the best possible outcome. Contact us today to get started on your journey to a successful home sale!

CoreLogic’s August data shows median Days of Market by city:

Perth 10 days

Brisbane 20 days

Adelaide 28 days

Sydney 34 days

Melbourne 39 days

Canberra 49 days

Darwin 50.5 days

Hobart 54.5 days.

The median DOM by region is:

Western Australia 28.5 days

Queensland 29 days

South Australia 46 days

NSW 54 days

Victoria 58 days

Tasmania 72.5 days

Northern Territory 86.5 days.

A low median DOM indicates the market is strong and buyers are acting quickly.

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House prices will rise nationally by 5.3% over the next six months and by 5.6% during 2025, KPMG’s new property report on Australia’s capital cities finds.

Apartment prices across the country will see an average rise of 4.5% by December and then match houses by growing by 5.6%  in the following 12 months.

For the next six months, there will be considerable national variation with Perth house prices rising by over 10% while Darwin and Hobart only experiencing 1.4% growth. For units, the predicted increases range from Perth’s 8.6% to Canberra’s 1.3%.

But in 2025, there will be much greater house price growth consistency across the country. Melbourne houses will rise the most by 6.5% followed by Canberra at 6.0%, but even the lowest, Brisbane will still rise by 5.1%. By contrast, units will still have considerable regional variation next year, ranging from Perth’s 8.0% growth to Brisbane’s more modest 2.5% increase.  

The previous 12 months, to March 2024, saw a 7.7% national rise in house prices – with Perth, Adelaide and Brisbane the stand-out performers – and 6.1% in apartments.  The slower growth over the next six months is attributed to a slower rate of migration, and the cooling impact of high interest rates. Prices will then start rising slightly faster during 2025 as rate cuts start to be introduced by the RBA, as KPMG anticipates. 

Rents are tipped to rise by 4-5% over the next two years, having increased by 7.8% over the past year, the largest increase since the GFC in 2008/9. 

Dr Brendan Rynne, KPMG Chief Economist, said: “In a year of high interest rates and inflation and subdued consumer sentiment the housing market has withstood all those factors and still provided strong price growth, due to demand outstripping supply. Even the much-anticipated ‘fixed-rate cliff’ – the transition of mortgage holders off lower fixed rates to higher variable rates – has only had a mild impact and households have so far coped well with the rate rises, due to a robust labour market and Australia’s historic low unemployment rate.”

“Supply has remained insufficient, and while we do forecast a slight rise in housing approvals, this will take time to translate into actual housing completions, due to the time lag inherent in the process. Although material costs and financing costs have started to stabilise after sustained increases, labour costs continue to increase in response to high demand for qualified tradespeople. Many barriers remain to developers building new homes, while continuing high rental costs are pushing renters to look to buy instead, which is pushing up demand.”  

“After the exceptional house price increases  we have seen in several capital cities over the past 12 months, we do forecast a slowdown in the rate of growth, given the drop in migration, the delayed impact of high interest rates and a predicted increase in unemployment over the rest of this year. Foreign investment activity has also yet to regain its levels of two years ago. But overall we will still see solid price gains over the next 18 months, especially in 2025, as the RBA starts to introduce interest rate cuts, as we anticipate”.   

Forecasts of House Prices and Unit Prices (% y/y) 

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