Key takeaways
Perth outperforms: Property values show robust annual growth of 8.6%, making it a top-performing market.
Units lead the charge: Affordability constraints are driving strong demand and value growth in the unit sector.
High rental yields: While rent increases are slowing, the market remains tight with strong unit yields (5.6%) offering solid investor returns.
While the national housing market is finding its feet after a few interest rate cuts, Perth continues to carve its own path.
Perth's property values are still on an impressive run. In May, we saw a solid 0.7% rise in dwelling values. While Darwin took the top spot this month, Perth came in as the second-strongest performing capital city in the country. This isn't just a one-off blip; it marks the highest month-on-month rise we've seen since October of last year.
It’s clear the momentum is here to stay. Let's look at the bigger picture:
- Three-month growth: A healthy 1.6%
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Twelve-month growth: An impressive 8.6%
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Average annual growth (past decade): A steady 4.7%
Note: This consistent performance demonstrates the underlying strength and confidence in the Perth property markets, even as other cities have experienced more volatility.
Perth housing market trends
Here's the most interesting part of the story right now: the shift in focus towards the unit market. Since August last year, the pace of value growth has been noticeably skewed towards Perth's unit sector.
So, what's driving this? It's a classic two-pronged answer:
- Affordability Constraints: As house prices climb, more buyers are finding themselves priced out of a standalone home. Units offer a more accessible entry point into the market, and buyers are voting with their feet.
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Low Supply: There simply aren't enough units to meet this growing demand. With low stock levels in the multi-unit sector, the competition is heating up, putting upward pressure on prices.
Here’s a snapshot of the current median values, which clearly illustrates the affordability gap:
| Median Values | Price |
|---|---|
| Median Dwelling Value | $813,810 |
| Median House Value | $848,980 |
| Median Unit Value | $607,022 |
Source: Cotality Australia
Note: For first-home buyers and investors, the unit market is clearly where a lot of the action is.
If you're a landlord in Perth, you've had a golden run. While the market is still incredibly tight, the latest data suggests the pace of rental growth is starting to ease. After peaking at a blistering 13.8% annual growth in early 2024, the rate of appreciation is moderating.
The growth over the past 12 months, at 5.1%, is the slowest we’ve seen since September 2020. This doesn't mean rents are falling, but rather that the frantic pace of increases is settling into a more sustainable rhythm, likely due to affordability limits being reached by tenants.
| Rental Metric | Houses | Units |
|---|---|---|
| Weekly Rent | $690 | $660 |
| Gross Rental Yield | 4.1% | 5.6% |
| Annual Change in Rent | 4.6% | 7.7% |
Source: Cotality Australia
Note: Notably, rental yields for units (5.6%) are significantly outperforming houses (4.1%), making them an attractive proposition for investors looking for strong cash flow.
Perth house prices - the longer-term data
Perth's property market continues to be a standout performer. The unique combination of relative affordability, a strong economy, and tight supply is keeping values on an upward trajectory.
The recent interest rate cuts and the prospect of more to come are only adding fuel to the fire, boosting buyer confidence. While we're seeing some moderation in the rental market's growth pace, conditions remain firmly in favour of landlords.
Note: The key trend to watch is the unit market. As affordability continues to be a major factor for buyers, we expect demand for well-located apartments and townhouses to remain strong throughout 2025.
If you're thinking of making a move, the data shows that the Perth market is as robust as ever. Getting tailored advice based on your specific goals is the best next step.
- Also read:Melbourne property market forecast for 2025 | Is it a good time to invest in Melbourne?
- Also read:Latest property price forecasts for 2025 revealed. What’s ahead in our housing markets in the next year or two?
- Also read:Brisbane Property Market Forecast [2025] – What’s Ahead & Where to Invest
- Also read:Sydney property market forecast for 2025. Is it a good time to invest in Sydney?
- Also read:Lower Interest Rates Drive Home Prices Higher and Higher Over June | Latest Housing Market Stats Dr. Andrew Wilson
