Mid year Perth Property Market Update 2025

We are halfway through the year already, and we can all agree its been an interesting time to develop property in Perth. We are still flying along nicely with growth and demand, but there was an anxious and pensive start to the year.

Some big shifts in power play were underway, or possible, on the domestic and global stage. We had a federal election, from which we now have a labour government in ongoing tenure. We had a slow start to the year, but we can hazard a guess that people wanted to see what budget measures were going to be put in place that might impact the housing and construction market before moving too eagerly into big financial commitments.

There were also fears around the impact of Donald Trumps tariffs and other American treasury policies and mandates on the global economy, some of which had the ability to directly affect WA’s mining industry. The reserve bank of Australia was cautious around decisions until the dust settled on these two items, and consumer sentiment was reflective of this. Properties were still changing hands, but not at the frenzied pace they were pre Christmas.

Now that we are mid year into 2025, we can look at the data, and see where things sit. Below is our summary on what’s going on out there, our commentary on the impact on the Perth property , and what this means for property developers in WA.

Mortgage rates start falling, with most lenders passing on some savings off the back of the Reserve Bank of Australia’s decision to reduce the cash rate from 4.10% to 3.85%. we expect to see a few more cuts this year too, as inflation gets in check nicely. This is good for affordability- people can borrow as the cost of money and servicing debt falls. We expect by years end this will spur movement in the middle and upper market quartiles, where serviceability has stalled growth in pricing in may areas, leaving them undervalued. This will be the next wave of growth.

In light of this , it’s a good time to start targeting and securing assets in the B+ to A range in our opinion and getting a development project underway. Planning will take you at least 6 months, you don’t need to wait until a segment is moving before you jump in. spot the wave and get ready to ride it!

We also expect then to see commercial lending rates ease too, as the cost and availability of money becomes more competitive. Conventional lenders are still cautious supplying money to the residential small lot development sector on non-commercial terms however, particularly in the sub $5 million dollar space. As the few remaining lenders tighten up policy or leave this space, we would expect the void the be filled with new entrants in coming 6 months or so, or new product offerings to be become available form 2nd, 3rd tier and private lenders.

Nationally, the median property price in Australia hit a record-high $825,349 at the end of April. At the close of the quarter, this was the third consecutive month of increaser, up 1.1% overall.

Perth rose 0.7% to $807,728, now ahead of Melbourne.

Some other major capitals still remain below their previous peaks, despite all growing during this period:

• Sydney rose 1.0% to $1,194,709, to be 1.1% below the peak of September 2024.
• Melbourne rose 1.0% to $786,158, to be 5.4% below the peak of March 2022.
• Canberra rose 0.6% to $864,343, to be 6.4% below the peak of May 2022.
• Hobart rose 0.9% to $664,462, to be 11.1% below the peak of March 2022.

Overall, for Perth, the median price is 18.0 per cent higher than this time last year, with more growth tipped to follow.

We still aren’t building fast enough, and we have more and more migrants arriving every week, both from interstate and overseas, with record unemployment and more jobs available than you can poke a stick at, across multiple industries, not just mining and resources.  REIWA President Suzanne Brown notes that Population growth has been while declining slightly, but is still strong, and fueling ongoing demand for housing.

Active listings for sale were  4,300 approx  at the end of May 2025, this being 6.6 per cent lower than April but about 30% per cent higher than a year ago. Listings are falling again after a post Christmas spike in listings, after lots of covid property development legacy product hit the market, but this is now mostly absorbed. The clear picture- listings will fall again, and we haven’t addressed the underlying production issues that are keeping us a long way off achieving a balanced supply market. This means prices can only keep going up, albeit at more sustainable annual growth rates.

The re-elected ALP government of Anthony Albanese is now full steam on rolling out policy to make good on promises it made to first home buyers and homeowners during the election, all of whom are struggling with home ownership nationwide.

The following measures are now in motion :

1. The Home Guarantee Scheme, which currently includes income caps ($125,000 for individuals and $200,000 for joint applicants) and is limited to 50,000 participants per year, will have all its caps lifted next year. This mans from 2026, restrictions on number of applicants annually and their earing will be lifted. The ALP have stated “For first home buyers, you’ll be able to buy an eligible property anywhere in Australia, with a deposit as low as 5%.” We are unsure entirely how addressing a supply issue (shortages materials, labour, planning bureaucracy, etc) by increasing demand is going to help, or if labour is engineering the largest subprime mortgage crisis event in Australia’s history. That remains to be seen. In the interim, opportunities will abound for developers out there to supply housing to the market; the affordable housing market will be in full flight next year with plenty of qualified buyers.
2. The government has also committed $10 billion to fund up to 100,000 homes across Australia , earmarked exclusively for first home buyers. Anthony Albanese has stated  “Funding will support enabling infrastructure, land purchases or construction to get these homes built – near work and family, only for first home buyers.”

So we think it’s likely you will see a new run and construction boom next year.

In light of the current state of play, it would behove you then to get on to a site and be build ready by end of year, and that means starting now.

If youd like to discuss the opportunities available now, how to optimise what to with developing sites you already have, or you are looking to get involved in project/acquire a site, please get in touch with our team and we can discuss your options.