Macro Drivers of Growth: The Big Picture
The residential market in Perth is currently being pulled forward by a mix of large-scale, structural forces. Understanding these macro drivers gives you a clearer view of why demand remains robust and where value is likely to flow next, and this is central to how we at Effective Residential view strategy.
Population & Migration Flows
Western Australia has seen impressive population growth. For example, the state’s population grew by approximately 2.4% in the year to December 2024, around 70,000 new residents. A large share of this growth is driven by overseas and interstate migration, both of which strengthen demand for housing, including residential stock in Perth. With more people arriving and fewer new dwellings being delivered, pressure builds on both housing stock and rental supply, naturally supporting residential value growth and stronger rental returns.
Infrastructure & Transport Expansion
Major infrastructure rollouts such as the second stage of METRONET, key road upgrades, and transport-oriented developments are helping shape how suburbs are valued. Easy access to the city, growing amenity, and improved connectivity enhance suburb appeal not just for homeowners but for investors and lifestyle migrants too.
Land Supply, Rezoning and Urban Release
Supply constraints remain a critical part of the narrative. Perth remains short of new listings relative to demand, and rezoning or urban release projects are still playing catch-up. Limited supply combined with strong demand creates a market primed for growth. These structural dynamics underpin the strong foundation of Perth’s residential market in 2025.
Micro Trends Shaping the Suburbs and Lifestyle Markets
Zooming in, we see specific trends at the suburb and lifestyle level that are giving shape to value shifts and investment opportunities.
Suburb Shifts: Where Value and Lifestyle Are Colliding
Suburbs that offer a mix of affordability, lifestyle amenity, and connectivity are gaining favour. Many outer growth-corridor suburbs and transport-axis areas are being watched closely for the next phase of capital growth. At the same time, inner-city or bayside suburbs continue to hold premium status, but competition is shifting to emerging value-oriented pockets.
Recognising where the next wave of growth is occurring is central to strategic real estate success.
Rental Yields, Vacancy Rates and Investment Appeal
Low vacancy rates and rising rents are part of the story. Rental listings remain tight, and median weekly rents in Perth increased around 5% in the first half of 2025. Rental yields remain relatively strong compared to other capitals, improving the investment case for strategically chosen suburbs.
Lifestyle Drivers: Work, Home, Amenity & Flexibility
The pandemic and post-pandemic world have shifted what people look for in housing. Larger homes, outdoor space, flexibility for working from home, and lifestyle amenities like beaches, rivers, and parks all play a greater role. For Perth, with its coastline, amenities, and relative value compared to east-coast capitals, these lifestyle drivers are amplified.
What 2025 Delivered: Key Outcomes & Market Metrics
So what did all this deliver in 2025? The short answer: solid growth with signs of moderation.
Price Growth & Supply Dynamics in 2025
Estimates for 2025 suggest growth in the Perth residential market remains positive. The annual change in Perth dwelling values was about +7.5%, and the median house price around $895,000 in September 2025. The market isn’t surging at the rapid pace seen during the post-pandemic boom, but it remains resilient and in demand.
Supply remains constrained, with listings about 45% below the five-year average. This ongoing low supply creates the structural basis for sustained value growth.
Rental Market Pressures & Vacancy Trends
The demand side is strong. Weekly median rents rose about 5% in the first half of 2025. Furthermore, vacancy rates in certain Perth markets remain very low, intensifying rental pressure and making rental investment more appealing.
Looking Ahead to 2026: What to Expect
As we move into 2026, the growth drivers remain in place, but the character of growth is likely to change.
Growth Moderation vs. Continued Strength
Many experts expect the rapid growth phase to slow somewhat, but not reverse. The Perth market is still growing, albeit at a more moderate rate. Affordability pressures, interest-rate settings, and more listings entering the market are likely to temper growth. Units may outperform houses as affordability becomes more stretched.
Suburbs and Segments to Watch
In 2026, the focus may shift to:
- Transport-corridor suburbs benefiting from METRONET and infrastructure investment
- Lifestyle-oriented suburbs near beaches, rivers, and amenities
- Outer growth-corridor areas where value remains accessible and upside remains strong
At the same time, prestige suburbs may experience slower growth simply because value is already embedded.
Risks and Headwinds: What Could Change the Game?
Even with solid fundamentals, some risks deserve attention:
- Interest rates staying higher for longer may impact affordability
- A faster-than-expected increase in housing supply could balance demand
- Slower migration or weaker economic growth could soften demand
Keeping an eye on these variables is essential for strategic decision-making.
What This Means for Buyers, Sellers & Investors with Effective Residential
At Effective Residential, we don’t just observe market forces, we plan for them. Here’s how this insight translates into strategy.
Strategy for Sellers: Timing & Marketing Edge
If you’re looking to sell, the 2026 window still holds opportunity. Structural supply constraints, population growth, and infrastructure tailwinds mean your property operates in a favourable environment. However, because growth may moderate, timing and presentation are more critical than ever:
- Present your property with high-quality visuals, data-backed pricing, and story-driven marketing
- Target buyers who recognise the suburb’s future growth drivers
- Allow for slightly longer transaction timelines as the market steadies
Strategy for Buyers & Investors: Where to Focus and Why
If you’re buying or investing, be selective and strategic:
- Focus on suburbs benefiting from infrastructure, rezoning, or amenity upgrades
- Prioritise areas where rental yields remain strong and lifestyle appeal is genuine
- Consider emerging suburbs for long-term value growth potential
The Perth residential market in 2025 is being driven by strong structural forces, including population growth, infrastructure expansion, limited supply, and lifestyle appeal. As we move into 2026, growth is likely to continue, but in a more measured way. That means strategy, insight, and timing matter more than ever.
At Effective Residential, we bring those insights to your doorstep. Whether you’re buying, selling, or investing, let’s work together to make your next move Effective.
👉 Book your Discovery Call today and find out how we can tailor a strategy that aligns with your goals and the market ahead.
