By Brett White, Licensee, RE/MAX Extreme
On August 12, 2025, the Reserve Bank of Australia (RBA) delivered another interest rate cut — trimming the official cash rate by 25 basis points, down from 3.85% to 3.60%. This marks the third rate cut so far this year and aligns with expectations from the big four banks and broader financial markets.
The RBA pointed to encouraging inflation data as a key driver, noting that core inflation has now returned to the 2–3% target band. That said, some of the easing is attributed to short-term government cost-of-living measures. Labour market conditions remain tight nationally, despite the unemployment rate nudging up to 4.3%. Wage growth has moderated, but productivity levels are still stagnant and unit labour costs remain elevated — all factors the RBA is watching closely.
Looking ahead, all four major banks are forecasting another rate cut in November, which would bring the cash rate down to 3.35% by year-end.
National Market Movements: Perth Still a Top Performer
Across the country, home values rose 0.6% in July 2025. Darwin led the way with 2.2% growth, followed by Perth (0.9%), then Adelaide and Brisbane (0.7% each). Perth’s 12-month growth now sits at 6.5%, ranking it fourth nationally for annual growth.
Perth’s housing market has consistently outperformed in recent years, driven by a sustained shortage of housing stock, strong population growth, and robust buyer demand.
WA Construction Costs: Still Climbing
Construction costs remain a hot topic in WA. Alongside NSW, our state recorded some of the sharpest increases in 2024, largely due to lingering supply chain constraints and a shortage of skilled trades.
While costs per square metre vary, WA developers are typically paying $1,800–$3,500 per sqm, depending on finishes and location. Builder delays, especially in regional WA, remain common — particularly in plumbing, electrical, and carpentry trades. This continues to stretch project timeframes and limit new housing supply.
Rental Yields: Perth Remains Strong Despite Slight Dip
Rental yields across Australia continue to show strong returns in most markets. Darwin leads the pack at 6.4%, followed by Hobart at 4.4%, and Perth at 4.2% — a slight decrease from 4.3% the previous month.
While yields have slightly eased, they remain highly competitive, especially when compared to Sydney’s 3.0%. This has kept Perth attractive to investors, particularly those focused on positive cash flow opportunities.
WA Leads the Nation in Population Growth
The latest ABS data confirms what many of us have already felt on the ground — WA remains the fastest-growing state in Australia. Over the 12 months to December 2024, WA’s population grew by 2.4%, outpacing the national average of 1.7%.
That growth came from two key sources:
- Overseas migration contributed 45,124 new residents.
- Interstate migration added another 12,612 people, second only to Queensland.
This continued growth in demand — particularly in Greater Perth — is expected to put ongoing pressure on housing supply.
Perth Property Listings: Still Well Below Balanced Market Levels
According to REIWA, only 3,292 residential properties were listed for sale across Perth as of early August 2025. That’s down from 3,675 just four weeks earlier and significantly short of the 13,500 listings typically needed for a balanced market.
Selling times remain fast. In July 2025:
- Houses took a median of 12 days to sell — 3 days longer than a year ago.
- Units also averaged 12 days on the market, slightly quicker than the previous month.
The data continues to reflect a highly competitive buyer environment.
Perth Rental Market: Vacancy Tightens Again
In July 2025, Perth’s median weekly rent for all dwellings held steady at $680, up 4.6% year-on-year. House rents rose to $685, while unit rents dipped slightly to $650.
Vacancy rates dropped to 2.4% in July, after holding within the 2.5–3.5% range for the past two months. This further tightening suggests the rental market may not yet have reached its long-term equilibrium.
REIWA reported just 2,330 rental listings in early July — down from 2,480 the month prior and also below the same period last year.
Tenants are taking slightly longer to commit, with median leasing times now at 17 days, up one day from July 2024.
Local Trends: Inner-Suburb Vacancy Near Zero
Vacancy rates remain extremely low in inner and coastal suburbs such as Fremantle, Bicton, Attadale, Alfred Cove, and Osborne Park, with many sitting between 0% and 0.5%.
By contrast, outer suburbs including Eglinton, Alkimos, Baldivis, Brabham, and Byford have seen slightly higher vacancy rates. These areas have had significant new housing supply come online, often investor-driven.
When assessing investment opportunities, the level and type of rental competition in a suburb plays a crucial role in determining both demand and rental return.
Our View: Perth Tracking Ahead of 2025 Forecasts
Here at RE/MAX Extreme, we’ve seen firsthand how the Perth market continues to defy expectations.
REIWA data shows median house prices increased 2.7% in Q1 2025. That alone puts the market on a strong path to meet annual projections of 9–11% growth.
In fact, our internal figures across select northern suburbs suggest even stronger performance — capital growth of 3.3% in Q1, outpacing the broader Perth average.
Buyer Demand Surging, Stock Remains Tight
Despite it being winter, activity levels remain high. Well-priced homes are attracting multiple offers, and open homes are seeing strong attendance.
We’re seeing particular demand in:
- Full-sized family homes in the $700k–$1m range
- Villas and townhouses in the $500k–$650k bracket, particularly among first-home buyers and investors
With the recent rate cut and Perth’s affordability relative to other capital cities, we expect this momentum to carry through the remainder of 2025 — provided supply constraints continue.
If you’re considering a move or just want to stay informed about the latest local trends, we’re always here for a friendly, no-pressure chat.
Source: Momentum Wealth, Real Estate Institute of Western Australia & CoreLogic