Western Australia’s economy is demonstrating impressive resilience. Despite rising business costs and ongoing labour shortages, confidence has reached a three-year high, according to the Chamber of Commerce and Industry WA.
In its latest Business Confidence Survey, 41% of WA businesses said they expect stronger economic conditions over the next three months, while 32% expressed confidence in the year ahead.
This positive outlook comes even as businesses continue to manage higher wages, increased insurance premiums and state taxes – all of which are placing pressure on margins. Labour shortages also remain a significant challenge across many sectors. However, strong commodity prices, easing trade tensions and renewed optimism in the resources sector are helping to counterbalance these pressures and reinforce WA’s economic momentum.
What this means for property buyers
A confident economy is usually good news for property, lifting household sentiment and giving people the job security they need to buy a home. But the same forces driving that confidence can also push up costs.
Wage growth benefits workers but also feeds into higher construction and service prices. Insurance premiums and local taxes flow through to property costs too – both at purchase and throughout ownership.
That means affordability is still a hurdle, particularly in suburbs close to major job hubs, schools and essential services. These locations remain in high demand, with buyers prioritising access and lifestyle – and competition pushing prices higher.
If you’re planning a move, it pays to be strategic. Look for areas where long-term value still aligns with your needs, and act early before more buyers enter the market.
Implications for investors
WA’s strong economy isn’t just boosting business confidence – it’s also driving steady demand for rental housing.
Activity in the resources and construction sectors continues to draw workers to the state, while broader confidence across industries is encouraging more people to relocate and settle here. That growing population is putting added strain on housing supply and contributing to strong rental yields for investors.
Population growth and housing pressures
And that pressure is only set to increase. WA’s population has now officially passed the three million mark, after recording the fastest growth rate in the country last year at 2.4%, according to the Australian Bureau of Statistics. Most of that growth came from overseas migration, which has added further demand in an already tight market.
New research from the Bankwest Curtin Economics Centre (BCEC) shows just how stretched supply has become. More than 20,000 homes were completed in 2024 – but that still fell short of the state’s annual target of 24,000 under the National Housing Accord.
As demand continues to outpace supply, housing affordability is deteriorating. More than 210,000 WA households now consider their housing unaffordable – up 91% in just two years. Only 39% of renters and 48% of mortgage holders say their housing costs are manageable.
Rental conditions are particularly tight. Last year alone, Perth fell short by 7,700 rental homes just to keep pace with population growth. The median weekly rent has now climbed to $740 – a 76% increase since 2020.
According to BCEC Director Professor Alan Duncan, “relief is at least 12 to 18 months away, with rental costs unlikely to stabilise until 2026”.
Whether you’re planning your next home or investment purchase, understanding where WA’s growth is headed is key. As an expert Perth buyer’s agent, Resolve Property Solutions can help. To discuss your options, book a free discovery call with one of our buyer’s agents.
