As we step into 2025, Perth’s property market continues to be shaped by a unique blend of local dynamics and global influences. Here’s what we think this year will hold for buyers, sellers, and investors alike.

The Affordability Factor

Affordability remains a defining factor in 2025, particularly in Perth’s western suburbs. With interest rates expected to hold steady, buyers are likely to face continued restrictions in accessing finance. This constraint places increased pressure on properties in the lower price brackets, with a surge in demand for homes under $2 million. Buyers who can stretch their budgets are showing a preference for move-in-ready properties, further driving competition in this segment. Nedlands Specialist Michelle Kerr highlights this trend, saying that “buyers are willing to pay a premium, if funds allow, to secure a property that does not require any work or renovation”.

Although it’s not just the ready, done homes under $2 million that will continue to see demand. “We are also starting to see an increase in demand for smaller, older units that previously were overlooked. This is due to the massive increase in average prices across the western suburbs which now sees these smaller units as a good financial alternative within the area”, Michelle says.

What’s In Demand?

Demand for both family homes and apartments with generous layouts is expected to grow. As Perth’s population expands, more families are turning to apartments with 3-4 bedrooms in desirable suburbs where traditional homes may be out of reach. “As favourable areas become more and more expensive, we’re finding families will find that the typical family home in their favourite suburb may be out of reach, and will then entertain the prospect of apartment living in the same suburb, to still achieve their lifestyle goals,” says Wembley and West Leederville Specialist, Craig Gaspar.

North Fremantle and Mosman Park Specialist, Lucy Thomson agrees that demand for apartments is growing, saying that “apartments are becoming increasingly more popular due to low maintenance living, shared facilities and the desire for some buyers chasing a lock-and-leave lifestyle.”

The Supply Challenge

The limited housing supply has been a persistent challenge, and this issue shows no signs of easing in 2025. Many sellers hesitate to list their homes without securing their next property, creating a gridlock effect. Michelle says that “people are hesitant to sell until they can find something to buy, but there is nothing to buy! Whether it is a change in the economy or a change in interest rates, we will need to see something shift substantially for this current deficit to free up.” This supply deficit is exacerbated by population growth and a strong resource sector, ensuring that demand continues to outpace supply. Until significant policy changes or economic shifts occur, this trend is likely to persist.

Craig reflects on current stock levels, saying “our stock levels still sit in the 4000’s as of 21st January. When I started selling property in 2011, there were 18,500 properties on the market.” 

“Supply will be the defining factor as we enter 2025,” says Greg Williams, City Beach Specialist. “With the number of properties for sale and rent remaining stubbornly low, it would take a fall in our population or a significant increase in new housing supply to change the balance of supply and demand.”

Global And Local Influences On Perth’s Market

Global events and local trends play a pivotal role in shaping Perth’s market, although we sometimes tend to think we are immune from them! While Perth’s resource-driven economy provides some insulation, global economic changes and geopolitical events can still ripple through the local market. For example, financial market fluctuations and a new administration in the US could influence buyer confidence, however it’s too early to tell at the moment.

Though it’s early days, buyers and sellers can remain optimistic, knowing that property continues to be a secure and essential asset. “Despite having state and federal elections ahead of us and an unpredictable international landscape to contend with, the security of property as an asset class and the fact that housing satisfies a basic need should reassure both buyers and sellers this year,” says Greg.

Locally, Perth’s population growth remains a dominant force. The city’s appeal as a destination for domestic and international migration is supported by initiatives to attract skilled professionals, particularly in the medical sector. Additionally, the 2025 Australian federal election could have significant implications for housing policies and market dynamics.

What About Off-The-Plan?

Perth’s off-the-plan market is facing unique challenges and opportunities in 2025. The past couple of years have seen delays and cancellations in apartment developments due to rising construction costs, further constraining supply. This has intensified competition for existing housing options and delayed the much-needed introduction of new alternatives like townhouses and apartments. “The rise in construction costs for apartment developments over the last two years has seen many projects delayed or not commenced putting further pressure on supply of housing alternatives such as apartments and townhouses”, says Projects Lead, Steve Kerr.

Interest in off-the-plan projects is steadily growing, driven by buyers seeking affordability and modern amenities. Expats returning to Perth, along with buyers from over east and overseas, are fueling demand for properties that offer a relaxed lifestyle. Steve observes that “buyers are looking for lower cost alternatives like apartments to be able to stay in the inner suburbs with access to urban amenities.”

Downsizers are also driving interest in low-maintenance apartments and townhouses, reflecting a broader shift towards convenient living solutions. “With an ageing population worldwide, we expect to see people in Perth looking for alternative living options such as townhouses and apartments as they look to downsize to a low maintenance easy care lifestyle,” says Steve.

The government is addressing this housing supply shortage but it will take time before we see increased supply. For now, competition for off-the-plan properties remains strong, particularly in sought-after inner and western suburbs in Perth.

For buyers entering the Perth property market this year, this means being ready to act quickly, staying optimistic, and keeping an open mind:

• Be Prepared: Having your finances in order, including pre-approval for loans, is essential to act quickly in a competitive market. “The multiple phone calls to the unsuccessful parties are never easy,” says Craig. “If you’re setting out on the house hunt, try and have all of your financial ducks in a row. A pre-approval can go a long way in attracting a seller to your offer.”
• Stay Resilient: Don’t let the competitive market discourage you. “It’s difficult to ascertain where supply will end up in 2025, however, at present levels again, demand is outstripping supply”, says Craig. There’s a home out there for everyone, but persistence is key in a tight market.
• Explore Options: Broadening your search and connecting with local agents can help uncover opportunities. “Know your realistic budget, explore a range of properties and touch base with lots of local of real estate agents in case they have any off-market opportunities,” says Lucy.

When it comes to selling your home, preparation, timing, and strategy are key to achieving the best outcome:

• Focus on Presentation: Homes that are well-prepared for sale can attract premiums from buyers who want move-in-ready properties. Investing in presentation can significantly boost your sale price. Many agents may say that you don’t need to do much to get your home ready for sale because there is such a shortage of supply, but preparing your home has never been more important. “With buyers willing to pay over and above asking price for homes that require little or no work, presenting a purchasing option that delivers this is important in ensuring you get the maximum price for your property”, Michelle says.
• Strategic Timing: Listing before interest rates drop could maximise sale prices before increased competition floods the market. But ultimately, the number one advice is to always sell when you are ready to: “Ultimately sellers need to feel ready and willing to sell, although selling prior to interest rates coming down could have a strategic advantage to maximise sale price before competition increases”, says Lucy.
• The Three P’s: Price, presentation, and promotion are critical to ensuring a successful sale. Ensuring you work with a high performing local agent that understands these concepts will ensure you maximise your sale price and get the best result in the shortest possible time.

While challenges persist, Perth’s property market continues to present opportunities in 2025 for those who are prepared and strategic. Whether you’re selling, buying or just looking for a little advice on the western suburbs property market, we’re here to help. Get in touch with us via the form below for any questions you have and let us help guide you home.