PropTrack data shows that Perth home values have surged by 64% since the outbreak of the pandemic in March 2020.
According to CoreLogic, rental inflation in Perth is also the highest in the country, rising by 13.5% (houses) and 14.7% (units) in the year to May.
Source: CoreLogic
Domain has released its house price forecasts for the 2024-25 financial year, which tips that Perth will once again lead the nation, recording value growth of between 8% and 10% over the year:
If Domain’s forecast comes to fruition, Perth’s median house price would rise to a record $856,000, costing $78,000 higher than current prices.
Earlier this month, NAB also released forecasts showing that Perth dwelling values would lead the nation, with values rising by 13.7% in 2024 and by a further 6.2% in 2025:
The boom in Perth home values is being supported by turbo-charged population growth:
Western Australia’s population grew by 3.3% in the year to December, well above the national increase of 2.5%.
High net migration from overseas and interstate has fueled this population boom.
Despite the recent price boom, Perth housing remains relatively affordable to purchase, as illustrated below by PropTrack:
Due to high mining royalties and Western Australia’s GST windfall, Perth’s economy is also doing well.
Accordingly, there is more upside for Perth home values and rents.
A word of caution, however. Perth’s housing market has always been boom-bust.
When the iron ore market crashed from 2014 to 2019, Perth home values declined by 18% in nominal terms and significantly more in real terms.
The next commodity price crash could, therefore, cause another significant decline.
That said, Western Australia now has a GST floor, which should help to cushion the economic impact of falling commodity prices.
