Perth price growth at risk amid cooling buyer demand

Perth Housing Market Outlook: A Turning Point?

After an extended period of impressive growth, Perth’s property market may be approaching a pivotal shift. Recent data suggests buyer activity in Western Australia’s capital is beginning to cool, sparking concerns that home price acceleration could lose momentum heading into mid-2025.

What’s Causing the Dip in Buyer Demand?

Industry experts, including those at Smart Property Investment, highlight a combination of factors responsible for the softening demand across the Perth market:

Affordability challenges: Rapid price growth over the past 18 months has outpaced local income levels, reducing buyer access.
Interest rate uncertainty: While rate hikes have stabilized, uncertainty around future monetary policy continues to weigh on buyer confidence.
Market fatigue: Some buyers are now stepping back to wait for clearer signals around future pricing and competition levels.

Current Property Trends in Perth

Despite cooling buyer interest, Perth remains one of Australia’s more affordable capital cities. Median house prices continue to show moderate monthly growth, and low housing supply is helping to sustain a seller-friendly environment — for now.

The most striking figures are the annual growth rates, showing:

All Houses: 14.5% growth over 12 months
All Units: 27.3% growth over 12 months (the highest in the dataset)
Overall Combined market: 16.3% annual growth

Long-term trends show consistently positive growth across all segments over 3, 7, and 10-year periods, with 3-year growth being particularly strong (14.9-17.3% annually).

Investor Sentiment: Mixed Reactions

Property investors are divided. While some remain bullish due to Perth’s strong rental yields and population growth, others are wary of overextending as capital growth begins to taper off. Areas previously identified as high-growth hubs — like Baldivis, Byford, and Ellenbrook — may now face a rebalancing in pricing as supply catches up.

Are Opportunities Still There?

Absolutely. Slowing buyer demand doesn’t necessarily spell doom for the Perth market. Instead, it presents savvy homebuyers and investors with more breathing space to assess value opportunities. This could be particularly helpful for first-home buyers and interstate investors looking to take advantage of relatively lower property prices compared to east coast markets.

In fact, easing competition could make 2025 a strategic year to consider entering the market — while still taking a cautious, research-driven approach.

Tips for Buyers & Investors in a Cooling Market

Focus on fundamentals: Prioritize properties in growth corridors with strong infrastructure and rental demand.
Stay finance-ready: With lending criteria still tight, ensure your mortgage pre-approval is up to date.
Get professional advice: A qualified buyer’s agent or property investment advisor can help you navigate shifting market conditions.
Look long-term: Don’t be swayed by short-term market moves — Perth continues to offer robust long-term growth potential.

Final Thoughts

While Perth’s red-hot growth phase may be easing, the fundamentals of its property market remain attractive — especially for buyers willing to take a patient, strategic approach. With careful planning, 2025 could still present unique opportunities in one of Australia’s most dynamic capital cities.