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WA Property Market Update March 2025

The Western Australian property market has entered 2025 with a mix of optimism, cautious confidence, and signs of continued momentum in both the residential and retail sectors. After years of market fluctuations influenced by COVID-19, inflation, supply shortages, and interest rate pressures, the recent announcement of Australia’s first cash rate cut since 2020 has been welcomed by homeowners, investors, and developers alike. With ongoing population growth and economic stability in WA, this rate shift may spark renewed buyer activity and investor confidence. However, broader market trends—including supply constraints and the approaching federal election—will play a key role in shaping the year ahead.

WA Residential Property Market Update March 2025

In 2024, Western Australia’s residential property market significantly outperformed expectations, especially in Perth and its surrounding regions. A dramatic median house price increase—reported as 23.5% by REIWA and 19.1% by CoreLogic—demonstrated the state’s strong economic fundamentals catching up with years of undervaluation. Perth’s median house price is now $720,000 (REIWA) or $813,016 (CoreLogic), overtaking Melbourne in some comparisons and highlighting the state’s strong economy and evolving appeal.

This growth has been driven by a few factors: a sustained housing shortage, net positive interstate and overseas migration, rising wages, strong job data, and years of undersupply. The WA Government expects the population to grow by 1.7% in 2025–26, requiring approximately 20,000 new homes to accommodate this expansion. However, challenges remain. While building approvals have improved, completions are trailing behind, and a land supply crisis may further impact housing availability. Despite these constraints, listings have increased slightly, with stock still below balanced market levels. As such, WA remains very much a seller’s market.

Rental markets remain tight. Vacancy rates range from 1.9% (REIWA) to just 0.4% (SQM Research), far below the balanced range of 3–4%. Median rents rose around 9% in 2024, reaching $650 for houses. Stock levels remain low and may decline further as ex-rental properties are sold to owner-occupiers. Yields in Perth are among the best nationally, at 5.6% for units and 3.9% for houses, further incentivising investor interest from within Australia and beyond. Restrictions on foreign owned property as raised in the recent Federal Budget may have a medium to long-term impact, but for the time being there will still be immense pressure on tenants in WA.

Looking ahead, we expect a 10% median house price increase in Perth this year, driven by a surge in buyer activity within aspirational inner-city suburbs. Equity-rich homeowners are upgrading or renovating, particularly in suburbs within 10km of the CBD, like Morley, Bayswater, and Joondanna. Redevelopment opportunities in these areas are rising in appeal, with demand outpacing land supply.

In the outer suburbs (e.g. Baldivis, Ellenbrook, Armadale), previous investor-driven growth may level off, with some stabilisation expected as the market adjusts. The prestige market is also heating up, as seen in notable transactions like the $25 million sale at 177 Wellington Street, Mosman Park. Trophy homes and top-tier sales are expected to continue strongly into 2025.

The apartment market is another segment to watch. Historically slower than detached housing, it now shows signs of resurgence, particularly in well-located suburbs like Cockburn, Joondalup, West Perth and Northbridge. With high construction costs and growing demand for affordable inner-city living, established apartments are proving more accessible than house-and-land packages.

Regionally, Broome, the Pilbara, and Geraldton are each telling unique stories. Broome saw up to 22% annual price growth, with strong rental demand. In the Pilbara, high yields and corporate tenancies (mining companies in particular) are maintaining market strength. Geraldton has seen a surge in investor activity, with areas like Rangeway recording 46% median price growth in 2024. However, sustainability of this momentum may be tested later in the year as affordability and maintenance costs rise.

WA Retail Property Market Update March 2025

After several subdued years, Western Australia’s stable economic environment and strong population growth are helping support retail property sector confidence, while interest rate cuts and increased investor activity in 2024 have created momentum for 2025.

High-profile transactions like ISPT’s $36 million acquisition of the Clarkson Shopping Centre are encouraging signs of renewed faith in well-located, non-discretionary anchored assets. These retail hubs offer strong lease covenants and are increasingly popular among institutional and interstate investors, particularly due to favourable yield comparisons with east coast assets.

A notable trend in 2025 is the shift toward multi-use, experience-driven retail developments. The $400 million proposed redevelopment of Carillon City in Perth’s CBD illustrates this shift—incorporating retail, food and beverage precincts, student housing and a hotel. Such projects are designed to cater to changing consumer behaviours and enhance foot traffic in urban centres.

While caution remains around economic conditions and inflationary pressure, local shopping hubs and high streets continue to perform well, supported by the work-from-home trend and growing urban density. Occupancy levels are stable, and rental rates remain steady. However, buyer-seller expectation gaps may limit the volume of transactions in the short term.

Looking Ahead

As we see off March and head into April, the WA property market is off to a positive start following the first quarter of 2025, fuelled by population growth, improving affordability, and sustained buyer interest across both residential and retail sectors. Challenges such as land shortages to election-driven uncertainty remain, but the outlook is positive, particularly if interest rates continue to ease. For homeowners, buyers, and investors alike, opportunities abound—from upgrading into better suburbs, to exploring value in established apartments or retail investments.

If you’re ready to make your next move in the WA property market, contact the Finance team at McKinley Plowman today. We’re here to help you finance your property goals with tailored, expert advice. You can reach us on 08 9301 2200, or via our website.

written by:

Paul Moran

Paul has over 35 years of experience in finding financial solutions for homebuyers, investors and business owners.
A licensed broker and member of the Mortgage & Finance Association of Australia (MFAA), Paul’s extensive experience includes 20 years with a major bank, seven of which were as commercial banking manager.
Paul delivers a holistic financial solutions to achieve the best possible outcome for a client’s personal or commercial lending needs. Paul also provides a comprehensive financial consultancy to business owners on commercial, equipment and invoice finance.