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Rent vs Buy in Perth (2025): What the latest REIWA & RBA data says

ByBase Home Loans

Are you one of the many people scrutinising whether to Rent vs Buy in Perth? Perth’s housing market hasn’t cooled much in 2025 – just changed gears. Prices and rents are still rising, vacancies have loosened a touch, and mortgage costs have eased after the RBA’s recent rate cuts. With this in mind, we always have a number of clients that come to us asking if they should be renting or buying.

If you are wondering if you should rent or buy this year? Let’s weigh the trade-offs with the freshest numbers from REIWA, Housing Australia, the WA Government and the RBA.

The quick market pulse (Perth)

  • Prices: REIWA reported Perth’s median house price at $780k in May and around $797k by July as momentum continued into winter. Units also pushed higher, with REIWA flagging that unit price growth may outpace houses in 2025.
  • Rents: REIWA’s March-quarter snapshot had median weekly house rent at $690 and units around $650, with growth expected to be slower than 2024.
  • Vacancy: Perth’s rental vacancy rate has loosened from the crisis lows but remains tight at ~2.4% in July (a balanced market is ~2.5–3.5%).
  • Rates: The RBA cut the cash rate to 3.60% on 12 Aug 2025, noting inflation has moderated; markets expect the Bank to consider more cuts depending on the data. Lenders have started trimming mortgage rates.

New policy tailwinds for first-home buyers

  • Home Guarantee Scheme expansion (from 1 Oct 2025): Unlimited places and higher price caps so eligible first-home buyers can purchase with 5% deposits without LMI. You can read more about Perth property price caps for the scheme here.
  • WA stamp duty concessions (from 21 Mar 2025): Exemption to $500k and concessions to $700k in Perth & Peel – helpful if you’re under those thresholds; above them, budget for full duty.

Renting vs buying: how to think about the dollars (2025 settings)

If you rent a typical Perth home

Cash flow: Median asking rents point to ~$690/week for houses and ~$650/week for units. That’s ~$2,760–$3,000/month before utilities. You avoid large upfront costs and ongoing owner costs (repairs, rates, insurance, strata), and you keep your savings flexible for investing or lifestyle. But rents can change and you don’t have the security that you will have your lease renewed.

Risk/return: You’re less exposed to property market swings and interest-rate cycles, but you don’t benefit from capital gains or principal repayment.

If you buy a typical Perth home

Upfront:

  • Deposit: 20% on a ~$780–$800k house is $156k–$160k (5% under the federal scheme from Oct 1). Read all about deposits here.
  • Stamp duty: $0–reduced below $700k under WA’s concession rules; near the median ($780–$800k) you should assume full duty unless buying a unit or location that brings you under thresholds. ( Read more here )
  • Other: Legal, building & pest, inspections, moving, lender fees.

Ongoing:

  • Mortgage: With the cash rate at 3.60%, major-bank owner-occupier variable rates are commonly in the ~5%–6% bracket post-cut (check your lender). Repayments vary with rate and deposit.
  • Owner costs: Budget ~1–1.5% of property value p.a. for maintenance plus council rates, insurance and (if applicable) strata.
  • Upside: You capture capital gains and your repayment includes principal (forced saving).
  • Downside: Concentrated risk in one asset, and higher fixed costs if you need to move.

What today’s data implies for the decision

Reasons Perth renting may win (for now)

  1. You’re above the WA concession thresholds. Buying near the median can trigger full stamp duty; that’s a big upfront cheque versus renting and investing the difference. Want to know more about stamp duty? Read here.
  2. You expect to move within ~3–5 years. Transaction costs (duty, agent fees) can swamp short-term gains.
  3. You want diversification. With markets still rising — and the RBA open to more cuts — prices may keep climbing; but if your timeline is uncertain, renting while saving/investing can be rational.

Reasons Perth buying may win (this cycle)

  1. First Homebuyer support just got stronger. 5% deposits with no LMI + higher price caps from 1 Oct 2025 can bring ownership forward, especially for units or houses under the cap. Read about the latest changes here.
  2. Tight but easing rental market. Vacancy is off the floor, but still sub-3% – owning can stabilise your housing costs if you’re sick of rent jumps and competition.
  3. Falling rates support serviceability. The August rate cut flowed through many lenders; further easing is plausible but not guaranteed. Locking a sharp rate on a competitive variable (or part-fixed) deal can make owning cash-flow-comparable to renting, especially on units. Want to know how much you can borrow? Get in touch today.

A simple Perth breakeven frame (no calculator needed)

Use these back-of-the-envelope tests to compare a specific home you’re eyeing:

  1. Rent vs repay:
  • Take current weekly rent (say $690/wk) → ~$3,000/month.
  • Compare to estimated mortgage repayment at your quoted rate plus owner costs (rates/insurance/maintenance/strata).
  • If buying is within ~10–15% of renting on cash flow and you’ll stay 7+ years, buying often pulls ahead as principal builds and prices compound.
  1. Total cost gap:
  • Add the opportunity cost of your deposit (what you’d earn if invested) to ownership costs.
  • If you’re a first-home buyer under $700k, the stamp-duty concession can shrink the gap meaningfully; above $700k, the gap widens.
  1. Resilience check:
  • Could you handle rates +1 percentage point (buffer), a temporary vacancy if you rentvest, or a surprise repair?
  • If yes, the risk side of owning is manageable; if not, renting + investing may be safer this year.

What the experts are signalling

  • RBA: Cash rate 3.60% (12 Aug). The Board says inflation is near target and it stands ready to ease further as needed, but the pace will be data-dependent (labour market, inflation path). Translation: expect gradual easing, not a straight line.
  • REIWA: Expects 2025 growth to continue, with units likely to outperform and house prices still trending up but slower than 2024’s surge.
  • National portals: August updates highlight new record dwelling values nationally and rate-cut support for buyer demand – Perth remained a monthly riser.

If you’re leaning rent

  • Target newer stock or suburbs with rising vacancy to negotiate. Keep lease terms short if you think rents will flatten. (Perth vacancy ~2.4% and rising from 2024 lows.)
  • Invest the difference (the deposit you’re not tying up) in a diversified portfolio so you still build wealth.

If you’re leaning buy

  • Check your eligibility and Perth price cap for the 5% no-LMI scheme from 1 Oct 2025—timing your purchase a few weeks could be worth tens of thousands. (Housing Australia)
  • Aim (if possible) to buy under $700k to leverage WA’s duty concessions; for units/townhouses, this may be realistic.

Bottom line for Perth in 2025

  • If you’ll stay put 7+ years, have a stable income, and can either buy under the duty thresholds or use the 5% no-LMI scheme (from 1 Oct), buying often wins on long-run wealth—especially in the unit market where 2025 growth looks punchy.
  • If you’re mobile, above the concession bands, or prefer diversification while rates drift down, renting (and investing the difference) is perfectly rational right now—especially with vacancy normalising from crisis lows.

Sources & further reading

Working with one of Perth’s best mortgage brokers when buying your first home, can make a huge difference. We’re here to guide you and make it feel easy. If you’re ready to find out how much you can borrow and what your estimated upfront costs would be, make an appointment with a Perth mortgage broker today.

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.


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