Why the Next 1‑5 Years Matter
Perth has recently stood out among Australian capital cities for its strength in price growth, low vacancy rates, and sustained buyer demand. But as interest rates settle, supply constraints intensify, and the WA economy faces global headwinds, the coming years will test how resilient Perth’s property market really is.
For first home buyers, existing homeowners, and property investors, the decisions you make now will set your trajectory over the next decade. Understanding where the market is heading—rather than where it’s been—will help you position yourself wisely.
In this article we’ll dig into the key economic forces, credible forecasts, risks, and opportunity zones across Perth and WA.
Economic & Market Drivers to Watch
Interest Rates & Monetary Policy
Rate direction is one of the biggest unknowns. Many expect the Reserve Bank of Australia to ease rates in 2025, which could boost borrowing power and demand. But rate cuts may be gradual, and affordability remains stretched. According to OpenAgent, Westpac forecasts ~4.0 % growth, NAB ~4.7 %, and ANZ a more optimistic ~6.1 % for Perth in 2025.
KPMG’s recent Residential Property Outlook suggests a more modest ~3.3 % growth in house prices for 2025, with faster growth in units, as affordability limits push more buyers toward smaller dwellings.
Supply, Commencements & Housing Shortage
A critical piece holding up Perth’s market is constrained supply. According to the WA Government’s housing report, dwelling commencements are forecast to remain around 20,000–22,000 per annum over 2025–26 and 2026–27, up from low levels but still under pressure.
That supply side pressure is worsened by delays in title approvals, infrastructure bottlenecks, and challenges in delivering high-density construction. The state government is trying to pivot toward medium and high-density housing via a $1.4 billion investment in apartments and townhouses.
Population, Migration & WA Economy
Perth is benefiting from interstate migration and strong overseas migration. Western Australia’s population has surpassed three million and is projected to grow further. The resource sector, particularly mining, remains a backbone of the WA economy, and infrastructure spend is significant. While global commodity price volatility is a risk, WA’s diversified mining base offers resilience.
That said, economic reports suggest the WA economy will grow, albeit more slowly in the near term (e.g. 3.7 % growth in 2024).
Infrastructure, Urban Planning & Infill
Large transport projects like METRONET and state-level planning strategies (like Directions 2031 and Beyond) put focus on population density, infill, and linking suburbs to amenity.
As more buyers and renters prefer areas close to infrastructure, suburbs along transit corridors are likely to command stronger growth.
Economic & Market Drivers to Watch
Here’s what other credible sources are projecting:
Soho
Predicts 6–8% annual growth through 2025 to 2030. Their forecast is based on continued population growth, housing undersupply, and Perth’s affordability compared to other capital cities. While growth may stabilise from the highs of 2023–24, the long-term outlook remains positive for owner-occupiers and investors.
OpenAgent / Major Banks
Shares a range of predictions:
- Westpac: ~4.0%
- NAB: ~4.7%
- ANZ: ~6.1%
These mainstream forecasts reflect a cautious optimism, influenced by stabilised interest rates, improved consumer confidence, and ongoing buyer demand in family suburbs and investor-favoured corridors.
Here Property
Projects ~5.2% price growth for houses in 2025. The forecast reflects a more measured approach, suggesting that while growth will continue, the extreme gains seen in prior years will moderate. Here Property points to stronger demand in well-located, established suburbs near infrastructure.
REIWA
Suggests up to 10% growth across houses and units in 2025. REIWA’s predictions are grounded in current low stock levels, the slow pace of new construction, and strong investor interest. They warn that unless housing approvals increase, demand could continue to drive prices higher throughout the year.
KPMG Residential Property Outlook
Predicts ~3.3% growth in 2025, with a moderation to ~4.5% in 2026. KPMG takes a national economic view, with Perth outperforming due to its strong fundamentals but slowing slightly as affordability tightens. Unit growth is expected to outpace houses in percentage terms, due to affordability constraints and density policy shifts.
The consensus is that Perth is likely to continue growing in 2025, though not at the explosive pace seen in 2023–24. Many models suggest a shift toward steady, sustainable growth rather than runaway gains.
Risks & Headwinds You Must Watch
- Affordability constraints: Prices have outpaced wage growth, meaning fewer buyers can enter without stretching budgets.
- Interest rate surprises: If rates remain higher for longer or follow tighter monetary policy globally, borrowing costs squeeze demand.
- Supply catch-up: If new stock delivers faster than expected, it could dampen price pressure, especially in certain suburbs or housing types.
- Market segmentation: Outer suburbs or poorly serviced locations may lag behind inner suburbs with infrastructure access.
- Commodity / economic shocks: WA is tied to global resource markets—any downturn in major trading partners could ripple through.
- Data volatility: In low‑transaction suburbs, median house price data can appear erratic. Especially in prestige or low turnover areas. (Trent and Brendon discussed these quirks earlier.)
Opportunity Zones & Investment Strategies
Where might the best returns lie in the next 1–5 years? Based on forecasts, urban trends, and market pressures:
- Transit corridor suburbs: Areas along METRONET expansions or major transport upgrades.
- High-density developments & apartments: Especially where supply is limited and demand is for downsizing or rental options.
- Emerging growth suburbs: Outer suburbs with good infrastructure promise (Baldivis, Alkimos, Ellenbrook, etc.).
- Regional + coastal towns: With migration patterns shifting, regional WA towns with amenities are getting attention.
- Dual-income / multigenerational homes: Properties that allow multiple rental streams or additional dwellings may outperform.
Always align your property choice with loan structure, exit plans, and market timing, which is one reason why strategic mortgage advice matters.
What Strategic Mortgages Perth Brings You
As Perth-based boutique mortgage brokers, we combine local data, lender access, and market insight so you can move quickly when opportunity strikes. Whether you are:
- Buying your first home: We help you understand borrowing power and manage affordability constraints.
- Refinancing: We review your structure in the context of where the market is heading.
- Investing: We help structure investment lending to amplify capital growth while managing cashflow risk.
If you want to align your finance to what’s coming next, talk to our home loan brokers, or let our investment mortgage broker team map out strategy for your portfolio.
Summary
Perth’s property future looks strong, but the era of rapid double-digit annual growth may give way to more measured, sustainable gains of 4–7 %. Interest rates, supply constraints, and affordability are the levers that will shape outcomes.
Whether you’re buying, refinancing, or investing, now is the time to align your strategy with the market’s direction—not chase last year’s numbers. A well-structured loan, timely action, and local expertise will make the difference.
At Strategic Mortgages Perth, we believe in planning for the long term—not just reacting. Contact us today to build a lending strategy aligned with Perth’s future.
Book your free strategy call and let’s get started.
Sources Referenced
WA Government Budget Forecasts:
https://www.wa.gov.au/system/files/2025-08/update-april-2025.pdf
KPMG Residential Property Outlook (January 2025):
https://assets.kpmg.com/content/dam/kpmgsites/au/pdf/2025/kpmg-residential-property-market-outlook-january-25.pdf
KPMG Residential Property Outlook (August 2025):
https://assets.kpmg.com/content/dam/kpmgsites/au/pdf/2025/kpmg-residential-property-market-outlook-august-25.pdf
OpenAgent Perth Forecast Summary:
https://www.openagent.com.au/suburb-profiles/perth-property-market
Soho Perth Property Predictions:
https://soho.com.au/articles/perth-property-predictions-next-5-years
REIWA Market Forecast Commentary:
https://reiwa.com.au/news/reiwa-market-forecast-update/
API Magazine – WA Infill and High-Density Housing Push:
https://www.apimagazine.com.au/news/article/western-australia-pivots-to-higher-density-housing-amid-economic-uncertainty
MIRA Residential – WA Population Growth & Housing Insight:
https://miraresidential.com.au/blog/perth-housing-market-growth-forecast/
