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.