After a very successful 2024, property investors might be wondering whether Perth is still a market worth investing in or if it has run its course. The answer: Perth remains a strong market for property investors, with demand continuing to outpace supply.
While December saw a slight easing in rental conditions, January’s vacancy rate tightened once again, reinforcing the city’s ongoing housing shortage.
Supply versus demand
A key factor in this imbalance is Western Australia’s sustained high levels of population growth, driven by overseas and interstate migration. Western Australia has consistently been the fastest-growing state. In June 2024, WA experienced 2.8% growth compared to the previous June, according to the Australian Bureau of Statistics. The next highest growth was in Victoria at 2.4%.
This influx has placed a significant strain on the housing sector. The imbalance between supply and demand remains a challenge in both the rental and sale markets.
Despite a slight easing in December, January and February’s rental vacancy rates demonstrated the tightness that still exists in the city’s rental market. According to SQM Research, vacancy rates in February were just 0.6%. To put that into context, the Real Estate Institute of Western Australia defines a balanced market as between 2.5% and 3.5%.
Listings for properties for sale have also tightened, falling 0.2% in February 2025 compared to the same time last year.
Additionally, the new homes sector has struggled to keep up. ABS data shows 5,924 new dwellings were completed in the September 2024 quarter. While this was up from the previous year, it still falls short of the target set by the National Housing Accord, which requires 6,500 new homes per quarter.
Why this trend isn’t likely to change soon
One of the key factors driving population growth in WA is the state’s strong economy. The Commonwealth Bank’s State of the States report for January 2025 ranked WA first for the second consecutive quarter.
The strong economy has been bolstered by the resources sector, which continues to attract workers to the state. According to the WA government, this sector provided more than 134,000 jobs in the 2023-24 financial year, marking its seventh year of growth.
The economy is also projected to continue growing with the latest government forecasts showing gross state product will rise 2.25% in the 2024-25 financial year, and a further 2.5% in the 2025-26 financial year.
What this means for investors
For property investors, Perth offers a trifecta of advantages:
1. A strong (and growing) economy will continue to attract people to the state. Investors can expect consistent demand for well-located properties, reducing the risk of vacancy.
2. More people means more homes are required, which will continue to put upward pressure on asking rents, delivering strong rental yields.
3. Perth’s median dwelling price is lower than those in Sydney, Brisbane, the ACT, Adelaide and Melbourne, according to PropTrack. This relative affordability compared to other capitals makes it an attractive option for investors looking for an easier entry point with solid growth potential.
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.
