Is the Perth property Market boom coming to an end? 

The Perth property market has experienced a remarkable surge since 2022, outperforming other Australian capitals with impressive double-digit growth each year. However, as history shows, no boom lasts forever. Investors and homeowners alike are now asking: When will this property boom come to an end?

What’s Fueling the Boom?

To understand where the market is headed, it’s essential to first unpack why Perth is booming in the first place:

• Affordability Advantage: Compared to Sydney and Melbourne, Perth remains significantly more affordable. This has attracted both first-home buyers and interstate investors seeking better value.
• Population Growth: WA’s post-pandemic population growth, driven by returning expats and interstate migration, has intensified demand for housing.
• Rental Crisis: Tight rental conditions, with vacancy rates hovering around historic lows, have pushed more renters to consider buying, adding upward pressure to prices.
• Resource Sector Strength: WA’s economy, underpinned by mining and exports, has remained resilient, supporting job growth and wage stability.
• Supply Shortages: A lack of new housing stock due to construction delays and labour shortages has restricted supply, keeping prices buoyant.

Signs the Market May Shift

While the fundamentals have been strong, no boom lasts forever. Several indicators suggest that the Perth property market could cool in the not too distant future:

Interest Rates: The Reserve Bank has steadily raised interest rates since 2022. While Perth has remained resilient so far, and rates have perhaps reached their peak and are starting to come down, higher borrowing costs may eventually reduce buyer capacity.

Affordability Squeeze: Prices, while still relatively low compared to the east coast, are rising. If wages don’t keep up, housing may become less accessible for many.

Investor Activity Cooling: Investors chasing high rental yields have propped up demand, but signs of tightening lending conditions or changes in policy could slow their enthusiasm.

Potential Oversupply: Although it seems unlikely in the near term, if construction rebounds too quickly, an oversupply scenario could put downward pressure on prices.

Key Indicators to Watch

Understanding the dynamics of Perth’s property market requires more than just observing price trends. Here are four critical metrics to monitor:

1. Days on Market (DOM)

The average number of days a property stays on the market before being sold is a vital indicator. A decreasing DOM suggests high buyer demand and a competitive market, while an increasing DOM may indicate waning interest or overpricing.

2. Vendor Discount

This metric reflects how much sellers are reducing their asking prices to secure a sale. A low vendor discount typically indicates a seller’s market, whereas a high discount suggests buyers have more negotiating power.

3. Sales Volume vs. Listings

Analysing the relationship between the number of sales and the number of properties listed for sale can provide insights into market balance. High sales volume coupled with low listings often signals strong demand, while high listings with low sales may indicate oversupply or reduced buyer interest.

4. Vacancy Rates

In the rental market, vacancy rates are crucial. A low vacancy rate indicates high rental demand and potential upward pressure on rents, while a high vacancy rate may suggest an oversupply of rental properties.

Tools to Analyse the Market

To effectively monitor these indicators, investors can leverage various tools:

• CoreLogic RP Data: Offers comprehensive property data, including sales history, price trends, and demographic information.
• SQM Research: Provides detailed vacancy rate statistics and rental yield data across different regions.
• Real Estate Institute of Western Australia (REIWA): Supplies local market reports, including sales volumes, median prices, and days on market.
• Australian Bureau of Statistics (ABS): Delivers macroeconomic data, including population growth, employment rates, and economic indicators that influence the property market.

Real-Life Examples Where these indicators rang true

1. Perth’s Previous Boom (2007–2014): An analysis of DOM, vendor discounts, and sales volumes indicated a cooling market before the downturn.
2. Melbourne’s Market Shift (2017–2019): Rising vacancy rates and declining sales volumes signaled the end of the boom.
3. Sydney’s Market Adjustment (2015–2017): An increase in vendor discounts and longer days on market preceded the market slowdown.

So, When will Perth’s Boom End?

Predicting the precise end of a property boom is always tricky – markets are influenced by a complex mix of economic, political, and psychological factors. However, most analysts agree on a few key points:

Short-Term Outlook (2025–2026): Continued growth is expected, though at a potentially slower pace. There’s still unmet demand, and supply constraints persist.

Medium-Term Risks: From 2026 onwards, improved housing supply, and broader economic conditions could start to flatten the curve.

Long-Term Trends: Perth may not experience a sharp “bust,” but rather a plateau or soft landing – especially if demand gradually meets supply and macro conditions remain steady.

The Perth property market has proven remarkably robust, and while the boom might not last forever, there’s little evidence to suggest an imminent crash, barring unforeseen global events. Instead, a gradual transition to a more balanced market is the most likely outcome.

Monitoring the key indicators mentioned above is essential for anticipating shifts in the market. By utilising the right tools and staying informed, investors can make strategic decisions to navigate the evolving landscape.

For buyers and investors, this means now is a good time to reassess goals, secure finance and stay informed about emerging trends. Perth may not be at the end of its cycle just yet—but the next chapter could look very different.

If you’re wanting to discuss a bridging loan, a pre-approval, investment loan or a refinance to put your best foot forward in the current Perth property market, we’d love to help so please get in touch with one of Perth’s best mortgage brokers 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.