The imposition of sweeping US tariffs on global imports has introduced a new wave of uncertainty for the Australian economy.
For Western Australia in particular, the state’s direct exposure to the US market is low. But, as Premier Roger Cook has pointed out, the state’s role as a supplier to US suppliers, particularly through iron ore exports to China, means that any disruption in those markets may ultimately affect WA.
These tariffs, therefore, have the potential to create ripple effects that could influence the local property market.
Impact on Perth’s property market
One of the primary ways these tariffs could affect property in Perth is through increased construction costs. With tariffs on essential building materials like steel and aluminium, the cost of these materials globally is expected to rise. This means new construction and renovations are likely to be more expensive. This can put upward pressure on property prices, potentially making housing less affordable and dampening demand.
Another possible change is the impact on interest rates. In response to the broader economic uncertainty, there could be potential interest rate cuts from the Reserve Bank of Australia to stimulate the local economy.
Lower interest rates may make borrowing cheaper, which could encourage some buyers to enter the market. More buyers could mean more competition and upward pressure on prices.
On the other hand, given the ongoing uncertainty caused by the tariffs, many potential buyers may remain hesitant, choosing to wait for more stability before making significant financial commitments. This hesitation could result in a slowdown in property transactions in the short term.
Opportunities for investors
Despite the market uncertainty, there are still opportunities for savvy investors.
In times of economic uncertainty, property can be seen as a more stable investment compared to other asset classes like stocks. Putting your money into property could turn out to be a better long-term investment.
With consumer confidence declining due to economic uncertainty, property investors could also seize the opportunity to purchase property at a lower price, capitalising on a temporary dip in market activity before a potential rebound.
Additionally, while the broader Australian economy may face more uncertainty, WA’s economy is resilient with a strong resources sector. As a result, investors may look to Perth’s property market as a place to diversify their portfolios, knowing that as the market stabilises, there could be significant gains.
When you consider this trend, coupled with the potential for future interest rate cuts, there could be a window of opportunity for investors to enter the market before demand increases once again.
Looking ahead
While the trade tariffs may create short-term uncertainty, the fundamentals of Perth’s property market remain strong.
Forecasts are still positive for dwelling value growth, with the Real Estate Institute of Western Australia predicting a 10% rise over 2025, offering the chance to grow your investment.
Interested in buying a property in Perth? As an expert Perth buyer’s agent, Resolve Property Solutions can help. To discuss your options, book a free discovery call with a Resolve Buyers Agent.
