As we head into the second half of 2025, the Perth property market and home loan landscape continues to evolve – shaped by rising demand, shifting hotspots, falling interest rates, and changing borrower behaviours. Whether you’re a first-home buyer, investor, or looking to refinance, here’s what you need to know.
Market Momentum: Prices Continue to Rise
According to a Reuters poll, Australian home prices are set to grow steadily by 4–5% annually through to 2027. Perth stands out among capital cities, with a forecasted 5% growth in 2025. Locally, REIWA has projected a 10% increase in Perth’s median house prices by year-end, following a massive 24.2% surge in 2024.
What’s driving growth in Perth?
- Low housing supply
- Population growth
- Strong labour market
- Investor confidence
These factors continue to underpin price strength, even amid broader affordability concerns.
Housing Affordability & Rental Stress
Despite the bullish outlook, affordability remains a concern:
- Median dwelling price-to-income ratios are at record highs.
- Households now need an average of 10.6 years to save a 20% deposit.
- Renters are allocating 33% of their income to rent, a record figure.
However, WA remains relatively financially stable, with mortgage arrears below the national average, indicating borrowers are, for the most part, managing their debt well.
Refinancing Surge Amid Rising Arrears
A recent Equifax report reveals:
- Mortgage refinancing has surged 11% year-on-year.
- Investor borrowers made up 80% of refinance inquiries in March 2025.
- Mortgage arrears are rising fastest among borrowers with loans over $1 million, especially those aged 31–45.
- Credit card and personal loan arrears have also increased post-holiday season.
This underscores the growing pressure on borrowers and the heightened interest in reviewing loan structures and reducing costs. Are you ready to discuss refinancing? Click here to book a call now.
Shifting Property Hotspots
Following a 25-basis-point cash rate cut, homebuyer interest is shifting across Australia:
New Growth Areas:
- Darwin: 6.1% annual growth
- Inner Melbourne: Units up 5.5% in the last quarter
- Newcastle & Lake Macquarie: Strong investor demand and rental returns
Cooling Suburbs in WA:
- North-East Perth: -0.8% house price change
- Mandurah: Slowed growth (0.7%) and unit declines
- Bunbury: Price stagnation
Perth’s cooling in select suburbs may present an opportunity for value-focused buyers.
Lenders Slashing Rates Amid Fierce Competition
In response to the rate cut, lenders are battling for market share with aggressive home loan offers:
- 31 lenders have cut 306 variable rates (avg. 0.27%)
- 11 lenders have slashed 279 fixed rates (avg. 0.85%)
- Horizon Bank is now offering 5.24% variable (for FHBs with 30% deposit)
There are now 1,296 home loan rates under 5.75%, up from 857 the previous week, with over 25 lenders offering variable rates under 5.50%. Fixed rate options under 5% are also growing, hinting at stronger future demand for rate locks.
What This Means for You
Now more than ever, it’s crucial to:
- Review your current loan: You may be paying more than you need to.
- Understand your options: Rate structures, terms, and features can save or cost thousands.
- Make informed property decisions: Whether buying or investing, local market trends matter.
Let’s Chat
Whether you’re buying your first home, growing your portfolio, or considering refinancing, now is a smart time to speak with a mortgage expert. At Base Home Loans, we help you make confident decisions in a shifting market.
Get in touch today to explore how we can support your next property move in Perth or elsewhere!
Disclaimer: The information provided on this blog is for general informational purposes only and does not constitute financial or professional advice. While we strive to provide accurate and up-to-date information, mortgage laws and regulations can change, and individual circumstances may vary. We recommend consulting with a qualified financial advisor or mortgage broker to assess your specific situation and needs. Base Home Loans is not responsible for any actions taken based on the content of this blog. Always conduct your own research and consider seeking professional advice before making financial decisions.
