For much of the 2010s, Perth was seen by many as a “laggard” weighed down by the fading mining boom, subdued demand, and reduced investor interest. But over the past few years, things have changed dramatically.
In 2024–25, Perth has led the capitals in price growth. Reports indicate that in the past 12 months, median house prices in Perth rose by around 18 %, adding over $130,000 to the median value. In mid-2025, REIWA and other sources confirm that Perth is now topping national growth charts across both houses and units.
One of the most eye-catching recent shifts: for the first time in over a decade, Perth’s median home value has overtaken Melbourne’s. In May 2025, Perth’s median stood at $787,000, nudging ahead of Melbourne’s $782,000. While that’s a symbolic milestone (and broad indexes mix different housing types), it underscores how far Perth has come.
Other features of Perth’s current market:
- Tight supply & low vacancies: Perth is dealing with a housing shortage, partly because construction was muted during earlier years. Vacancy rates have been extremely low, amplifying rental pressure.
- Strong rents / yields: Rising rents, combined with lower entry prices relative to the east, are helping yield profiles.
- Population inflows & interstate demand: Western Australia is attracting more interstate migrants, boosting buyer demand especially from the east.
- Forecasts remain upbeat: Analysts expect further growth of 5-10 % in 2025 (though lower than the blistering gains of 2024), with some caution around macro risks.
Of course, this strong run isn’t unchallenged. Potential headwinds include interest rate increases, tighter credit, overshooting in some precincts, and macro shocks that may disproportionately affect resource-driven economies.
East coast vs Perth: Where they diverge (and converge)
Comparing Perth with east coast capitals like Sydney, Melbourne, Brisbane and even Adelaide reveals both contrasts and lessons.
Affordability and relative value
Even with strong recent growth, Perth remains more affordable than Sydney and, until recently, Melbourne. That affordability makes it more accessible for investors and owner-occupiers seeking value. Meanwhile, in 2025, some projections favour declines or flat growth in Sydney and Melbourne while Perth may lead the pack. For example, SQM forecast that Perth would deliver the strongest growth in 2025 among the capitals.
Growth drivers are different
East coast markets are heavily driven by population growth (including international migration), jobs in the service/tech sectors, and infrastructure. However, many of those markets also face severe affordability constraints and housing supply bottlenecks. Perth adds an extra lever: the resources sector and state economic cycles tied to commodities. So, Perth’s upside is more leveraged to WA’s macro fortunes than Big East.
Volatility and cyclical risk
East coast markets, especially Sydney and Melbourne, tend to swing more aggressively with monetary policy, credit cycles, and global investor sentiment. Perth, which has more of a resource-cycle overlay, may lag early in a downturn but also has potential to surprise on the upside when conditions align.
Catch-up and re-rating potential
One of the narratives around Perth is that it was undervalued for so long that the current run is, in part, a “re-rating” rather than pure organic growth. In contrast, many east coast markets are already highly priced, with less room for multiple expansion, so future gains tend to depend more on tight fundamentals (supply, zoning, infrastructure) than valuation re-rating.
Diversification benefit
For east coast investors, allocating some capital to Perth offers geographic diversification: exposure to a different state economy, potential upside detached or lagged from east coast cycles, and perhaps more value per dollar.
Perth’s property market in 2025 is no longer a sleeper it has become a leader in many respects. Its recent outperformance, symbolic takeover of Melbourne in median price, tight vacancy and supply conditions, and rising demand all point to a capital in the midst of transformation.
That said, east coast markets still dominate national headlines and remain centres of economic gravity. Perth’s relative advantage lies in its value, upside from re-rating, and leverage to WA’s distinct economic drivers. Its challenge is to sustain momentum without overheating, and to weather macro shifts that tend to hit resource-linked economies harder.
Ben Lamers Buyers Agent- Western Australia and affiliate with The Savvy Bidders made these comments about the Perth market.
With over 25 years’ experience in the Perth property market, I have seen markets rise and fall and the different drivers influencing the market. This one shows a recent surge in prices and is very different to the past property market increase in values.
Firstly, this is not resource driven, although many may say it is due to it being in Perth, secondly it’s not driven by investors from overseas or interstate. The main driver has been simply a lack of supply mainly due to the slow building, and creation of new product into the market to meet local demand.
The first two years of this cycle has been catch up to the rest of the country due to a 12 year period of low growth, now it is at a point where we have demand far outstripping supply in both land lots, and built product of apartments and houses. We are even seeing seasonality in the market has gone and buyers are genuinely trying to get into the market as best they can.
Currently, there are approximately 2,900 properties for sale in the Perth market, land, units and houses. At the moment, there are consistently seeing 750 to 800 sales per week which means there is only about 3.5 weeks of stock left on the market at any given time. To put that into perspective, Perth usually has 13,000 properties for sale at any given time in a normal market where prices are stable, and this supply would meet the market demand.
So, here we are, at a point where even if we stop people from coming to Perth, it’s going to take a long time to meet the demand of the current population. There is a real need to create more supply however that could take at least 5 years to get anywhere near the supply we need.
Nobody really knows what the future holds but based on past experiences, this scenario is going to still drive growth for years to come. My take on the current situation is that buyers will eventually get fatigued, and serviceability will become an issue, and the growth will slow down gradually.
The most vulnerable parts of the market when this eventuates is going to be the lower end of the market where 5% deposits on poor quality assets that were purchased in the heat of the moment will suffer. The middle to top end will be more insulated from any sift.