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WA Property Market Update: Growth Expected to Continue in 2025

Posted by Empire Property on 21/01/2025
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Western Australia’s real estate market remains a standout performer, with Perth and its regional centres experiencing significant growth in 2024. According to REIWA’s 2025 property market update, Perth’s property prices are forecast to grow by another 5% to 10%, following a record-breaking year.

Record-Breaking Year for Perth

Perth’s median house price experienced a remarkable 24.2% increase in 2024, jumping from $600,000 at the end of 2023 to $745,000 by December 2024. Similarly, the median unit price rose by 21.4%, from $412,000 to $500,000. Both house and unit prices ended the year at record highs, with the median house price 36.7% higher than its previous peak of $545,000 in 2014. The median unit price also surpassed its peak of $450,000, set in 2014, and ended the year 11.1% above that figure.

While 2024 saw extraordinary growth, REIWA expects the pace to moderate in 2025. The median sale prices for houses and units are forecast to rise by 5% to 10%, reflecting a more balanced market.

Factors Influencing the 2025 Market

REIWA CEO Cath Hart highlighted several factors that could impact market activity in 2025, including state and federal elections and fluctuating interest rates.

“Market activity often slows in the lead-up to elections, especially when housing policies are key issues. The ongoing debate over when interest rates will be cut is also causing some hesitation among buyers. However, if rates do decline, market activity is likely to pick up,” Ms. Hart explained.

Despite a potential slowdown, Perth’s market fundamentals remain strong. Western Australia recorded a population growth of 2.8% in the year to June 2024, supported by a robust economy and low unemployment rates.

“Demand for established housing remains high, and properties are still selling quickly, even though the urgency seen in 2024 has eased slightly. As prices continue to rise, affordability will become a greater focus for buyers, with affordable suburbs and units likely to remain in high demand,” Ms Hart added.

Perth’s Rental Market: Easing Supply Pressures

Perth’s rental market showed signs of easing in 2024, as the vacancy rate rose from a record low of 0.4% in March to 1.9% by the year’s end. This shift was attributed to changes in tenant behaviour and an increase in rental supply.

“People adjusted to rising rent prices by seeking smaller or more affordable rentals, moving in with family, or buying their own homes. Additionally, some tenants moved into their completed new builds, freeing up existing rental properties,” Ms. Hart explained.

Despite these changes, rental prices reached new heights in 2024. The median weekly dwelling rent peaked at $650, an 8.3% increase from the previous year. House rents rose to $670 per week, up 8.1% year-on-year, while unit rents climbed 14.0% to match the dwelling median of $650 per week.

Looking ahead, rent prices are expected to grow at a slower rate in 2025, with more periods of stability predicted as investor-owned builds are completed. However, rental demand will remain strong in areas close to Perth’s CBD, lifestyle hubs, and transport links.

Regional WA: Bright Spots of Growth

Regional WA also enjoyed a strong 2024, with Bunbury emerging as the top performer. The city’s median house price surged 27.3%, driven by local employment opportunities, improved medical facilities, and the lifestyle appeal of the South West. FIFO families have also been drawn to Bunbury, thanks to the Busselton airport, which makes travel more convenient.

REIWA predicts that Bunbury, Albany, and Geraldton could see house price growth of 10% to 15% in 2025, while Broome, Busselton, and Esperance are expected to grow by 5% to 10%. Busselton, however, may encounter an affordability ceiling, with buyers already looking to neighbouring areas like Bunbury for more affordable options.

On the other hand, Karratha, Kalgoorlie, and Port Hedland are likely to see more modest growth of up to 5%.

A Balanced Year Ahead

The rental market in regional WA is expected to follow a similar trajectory to Perth, with easing conditions in some areas and moderate rent price growth in others. Albany, Busselton, Esperance, and Geraldton are predicted to experience the most growth, while Karratha and Port Hedland may see stability or slight declines.

Overall, 2025 is shaping up to be a year of steady growth for WA’s property market. Whether buying, selling, or renting, engaging with a REIWA agent can provide valuable insights tailored to specific market conditions.

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