The US-Iran conflict may seem far away, but it takes place in a crucial geographical region where a significant share of the world’s oil is shipped through. The impact on oil prices is already shaping conditions in Australia, including the property market.
According to the Real Estate Institute of Western Australia (REIWA), higher fuel costs are placing pressure on building expenses and causing delays in the supply of materials.
If the conflict persists, what could this mean for Perth’s housing market?
How the Middle East conflict impacts local property markets
Approximately 20% of the world’s total traded oil passes through the Strait of Hormuz. Disruptions to this vital shipping route drive up global oil prices, which then flow through to higher fuel costs in Australia. This, in turn, increases the cost of manufacturing, importing and transporting building materials such as steel, concrete and timber.
At the same time, higher energy costs contribute to broader inflation. The Reserve Bank of Australia has already responded with two rate rises this year, and further increases are possible if inflation persists. Rising interest rates typically reduce borrowing capacity and can dampen overall buyer sentiment.
Why Perth may react differently to other capitals
Perth’s position in the national economy means the city could weather this period differently from other capitals.
Western Australia is a major exporter of liquefied natural gas (LNG) and commodities. When global energy prices rise, the state’s economy tends to benefit – supporting employment, incomes and continued population growth. This, combined with sustained interstate and overseas migration, continues to underpin housing demand.
At the same time, rising construction costs and delays in the building sector may slow the delivery of new housing. When building becomes more difficult or expensive, more buyers turn to the already constrained established market, increasing competition and pushing prices higher.
The imbalance between supply and demand was already present in Perth before the conflict in the Middle East began, and current conditions are likely to amplify it further.
How Resolve Property Solutions can help
Challenges in the building industry are likely to maintain pressure on the sales market. A two-week ceasefire between the US and Iran was announced in early April, pending the outcome of negotiations. While these are encouraging developments, the situation remains tense, and conditions in the region can change quickly.
Even if a resolution is confirmed, any easing of oil prices and subsequent construction costs will be gradual as global supply chains slowly stabilise. Any relief for the housing market is likely to take time to flow through.
In a market shaped by both global and local pressures, having the right property search plan is critical. Working with an experienced buyer’s agent can help you develop a strategy to manage current complexities and make informed, well-timed decisions.
At Resolve Property Solutions, we cut through short-term noise to focus on what actually matters – strong fundamentals and long-term growth potential. In a market as competitive as Perth’s, having that kind of insight can make all the difference.
Need help finding the right property in Perth? As an expert Perth buyer’s agent, Resolve Property Solutions can provide data-backed insights to identify suitable properties. To get started, book a free discovery call and we’ll connect you with one of our buyer’s agents.
