Prices continue to rise in the West Australian property market, making investing in the residential sector as safe as houses. The commercial property market trend is showing similar patterns, with every area of Perth's commercial property market experiencing increases in 2024.
So what 2025 Australian property market trends can investors expect, particularly from Perth?
Residential property trends
Australian house prices have continued to grow, with sellers benefitting from lower interest rates, combined with a continued housing shortage. It’s now more expensive to buy property in Perth than it is in Melbourne, as increasing numbers of people realise it’s best to invest west.
Continued growth
Perth property price rise trends show no signs of slowing down, with the state’s strong economy, flourishing jobs market and strong population growth making it an excellent place to invest in the real estate market.
While the pace of growth may slow, experts believe that Perth prices will continue to rise. Domain’s chief of research and economics, Nicola Powell, said: ‘Growth will slow compared to past cycles, but affordability is still a major barrier, with housing costs consuming a large portion of household income.’
With further interest rate cuts a strong possibility, residential property prices look set to continue to climb.
Perth property price trends
Perth property prices are staying high, with house values having increased 6% over the course of this year (2025). The government is trying to address the housing shortage by delivering new homes, but they’re still falling short of the numbers required to keep up with demand.
The shortage of housing supply is even more acute in the rental market, with increased migration tightening the market further.
Scarcity of existing properties
As part of the government drive to provide affordable housing, 20,000 new homes were completed in 2024. This fell short of the National Housing Accord annual target by 4000 homes.
This scarcity is a worrying Western Australian property market trend. Perth’s rental sector also fell 7700 homes short of simply keeping pace with the rise in population from March 2023 to the end of March 2024. Undersupply continues to drive house prices upwards.
Increased investor activity
The housing shortages provide great opportunities for investors. The median rent has risen to $740 a week, which is a 76% increase since 2020.
And investors are making the most of these opportunities. Stats from the Australian Bureau of Statistics (ABS) show an increase in loans to property investors during the second quarter of 2025.
RBA Governor Michele Bullock said: ‘As interest rates fall, activity in the housing market picks up.’
The impact the increased investment is having is clear. 27 new Perth suburbs joined the million dollar club in the year to 2025. The number of suburbs with a median property price of over $1 million is now 113.
Rental market still tight
The price rises are making the rental market extremely tight, with rental growth squeezing the limits of affordability. A recent report from the Bankwest Curtin Economics Centre (BCEC) found that over half of West Australians consider their housing unaffordable.
BCEC also revealed that the median rent has soared by nearly 80% in the previous four years. It’s now the equivalent to 30.6% of average rental income. Clearly, it pays to be a landlord.
Migration
One of the factors responsible for the skyrocketing prices is increased migration. Australia’s population grew by 1.7% in 2024. The state welcoming the most new arrivals was Perth.
Australian Bureau of Statistics Head of Demography, Beidar Cho said: 'Western Australia had the fastest rise in population growth, up 2.4 per cent in 2024.’
Changing priorities for living situations
Steep house prices and strong demand are leading to changing priorities for living situations. The price of units is catching up to the price of houses, as people seek to get on the property ladder anyway they can.
Mixed use developments are also growing in popularity, while we’re also seeing a rise of multi-generational living as young people stay home longer to save, or families combine incomes to find a home to accommodate multiple generations.
Price of units catching up to houses
Units may even outperform houses for price growth in 2025, according to REIWA. Both house and unit median sales are at record highs. But while the median house sale price is trending towards 10% growth over the year, unit prices are set to achieve an increase of 15%.
‘The strong rise in house prices has seen demand increase in the unit market, which offers more affordable alternatives to houses,’ said REIWA President Suzanne Brown.
Increased popularity of mixed use developments
Mixed use developments, which combine offices, retail, and residential, are a growing commercial property market trend, because their mixed usage makes them a great investment. If done correctly, you can create activation and interaction with the development for close to 16 hours a day.
It’s not a case of just throwing together some offices and a few apartments though. Successful mixed developments take time to curate their offering. Working with an experienced mixed use developer will allow you to maximise your investment by ensuring each component of the development complements each other.
Rise of multi-generational living
Another Australian property market trend developing is the rise of multi-generational living. Typically, multi-generational living is either young adults remaining in the family home for longer, or young families clubbing together with their parents to buy a larger family home for everyone.
The Household Income and Labour Dynamics in Australia (HILDA) survey found that 31.2 per cent of men aged 26 to 29, and 27.5 per cent of women in that age group were still living at home in 2021 — up 9.9 points and 11.6 points respectively when compared to 20 years earlier.
Intergenerational living, which is when two or more generations live under the same roof, is also popular with migrant families, who are used to living with several generations of their family.
Government incentives to invest
The government is providing the property market with incentives to invest. These are aimed at helping aspiring home buyers get into their own homes. But there are also incentives for property developers to invest in the market.
The First Home Owners Grant
The First Home Owners Grant is a $10,000 one-off payment to help first home owners get onto the property ladder. They can also benefit from stamp duty concessions and cheaper mortgage rates through Keystart Home Loans.
Interest rates cut
The Reserve Bank has delivered three interest rate cuts so far in 2025, taking the cash rate to 3.6% for the first time since April 2023. The RBA is expected to make more rate cuts later in the year and into 2026. These cuts have the twin effect of increasing home prices, and borrowing potential.
This is particularly good news for investors as their increased borrowing capacity gives them greater opportunities and rising property prices reinforce the safety of their investments.
Commercial property market trends
Retail was the top performing sector for price growth in the commercial market, according to REIWA, although office space and industrial spaces also saw increases in sale prices.
Opportunities for developers
Perth’s increased migration and strong economy makes the commercial sector the property investment trend to get behind. As well as growing investment from Perth property developers, 2025 has seen increased enquiries from investors from the Eastern states.
While the interest is there, outlooks are conservative, with investors favouring properties with existing tenancies and focusing on the retail sector.
Retail over office space
‘Population growth creates more customers for existing businesses and it also brings in people wanting to establish their own businesses,’ commented REIWA president, Suzanne Brown.
‘This leads to demand for retail properties and, combined with investor interest, is creating momentum in suburban and lifestyle precincts.’
The annual median sale price per sqm for the Perth retail market was $5,238 at the end of March, a 23.8 per cent increase over the year and 6.3 per cent higher than the 12 months to December 2024, according to REIWA’s figures.
Tax benefits
Investing in a commercial property offers a number of tax benefits to offset the investment. You can claim deductions for any wear and tear that might cause a decline in the building’s value. If you hold the property for a certain period of time, you are also eligible for a capital gains tax (CGT) discount when you do sell.
You can also deduct a wide range of expenses for owning and managing a property. You should contact a tax specialist to make sure you’re maximising all the deductions you are eligible for.
Would you like to partner with Novus Projects?
Novus Projects is an experienced property developer, with over 30 years of industry experience in both the residential and the commercial space. We’ve seen the Perth property market through several different cycles, so we understand the best way to maximise your investment under every circumstance.
We offer a bespoke approach, tailored to you and your project. We can be as involved as you want us to be, guiding you through the process from the outset.
We can help with site selection, feasibility studies, planning, design and construction to help you bring your vision to life. Contact us today to discuss your next project and see how we can help.