Strategic Property Group managing director Trent Fleskens suggested that prospective first home buyers in Perth will face worsening conditions in 2025 as population growth continues to run well ahead of supply.
“Given there has been no change in our immigration numbers and no change in our ability to build houses any faster or cheaper, there’s no reason to suggest 2025 will be anything other than another strong year of property growth”, he said.
“The bottom line is, until we suddenly double our construction or halve our immigration, prices can only go up in a material way – not to mention what happens when interest states start falling”.
Fleskens is right, of course.
Perth dwelling values have soared by around 80% since the beginning of the COVID pandemic, roughly double the 41% increase recorded across the combined capital cities.
Most analysts also expect Perth to record double-digit price growth in 2025, which will push housing further out of reach for prospective first-home buyers.
For example, SQM Research’s Boom & Bust Report for 2025 projects that Perth home prices will lead the nation with 14% to 19% growth this calendar year.
“When I look at dwelling commencements, WA is currently building at half the rate it did in 2015”, SQM Research managing director Louis Christopher said.
“There is no building surplus coming for 2025, with WA set to build just 16,800 dwellings in 2025 with the state expected to expand by at least 90,000 people [in 2025]”.
The equation is even worse for first home buyers when you consider that Perth is also recording strong rental growth, which makes it harder to save for a deposit.
Source: CoreLogic
CoreLogic recorded 8.0% rental growth for houses in 2024 and 8.7% growth in unit rents.
The fundamental problem is that Perth’s population is growing aggressively via strong net overseas migration, supplemented by internal migration from other states.
Put simply, housing demand has massively overrun supply, resulting in surging prices and rents, to the detriment of tenants and prospective first-home buyers.
