The only way was up in 2024 for Perth’s property market, despite sky-high interest rates hurting mortgage holders and bringing house prices down over east.

Perth’s market exceeded many forecast predictions, recording a rise of more than 20 per cent off the back of record migration, an embattled construction industry, relentless inflationary pressures and a chronic undersupply of housing. Since 2019, Perth house prices have risen from a median of $484,788 to hit a record high of $882,075.

Residential Property: Strong Demand with Rising Prices

The Perth residential property market has seen a significant rebound since 2020, following a period of stagnation in the late 2010s. In 2025, this upward trend is expected to continue, driven by increasing demand for both new and established homes. There are several key reasons behind this positive outlook:

1. Population Growth: Western Australia’s population is growing steadily, aided by interstate migration from other states as well as international immigration. Perth is becoming an increasingly attractive destination due to its affordable lifestyle and relatively lower cost of living compared to Sydney and Melbourne. Population growth is a key driver of housing demand, particularly in the suburbs and outer areas of Perth.
2. Low Interest Rates: While interest rates are expected to gradually rise in the coming years, the Reserve Bank of Australia (RBA) has maintained historically low rates for some time. While this makes borrowing more accessible, it’s expected that the low rates will continue to support demand for property in 2025, particularly among first-time homebuyers and investors.
3. Limited Supply of Land: Perth’s inner suburbs have limited available land for new development, especially as urban sprawl is being restricted in favour of more sustainable growth. This limitation, combined with high demand, is expected to contribute to price increases, particularly for properties close to the city centre or near transport hubs.

Commercial Property: Mixed Performance

The commercial property market in Perth, particularly office space and retail, has faced challenges in recent years, partly due to the COVID-19 pandemic and the increasing shift towards remote work. However, there are signs of recovery as businesses adjust to the new normal and demand for office space starts to stabilise. Perth’s commercial property market in 2025 is likely to experience a mixed performance:

1. Office Space: With businesses adjusting to hybrid and flexible work models, demand for traditional office space in Perth may remain subdued in the short term. However, there is likely to be demand for modern, flexible office spaces, particularly in the CBD and other key business districts, as companies seek to reconfigure their office environments to support new ways of working.
2. Retail: The retail sector, especially bricks-and-mortar stores, has been under pressure due to the rise of online shopping. However, Perth’s retail property market may see some growth in 2025, as consumer confidence returns and more people return to physical stores. Local shopping precincts and suburban retail areas could see renewed interest as foot traffic rebounds.
3. Industrial and Logistics: The industrial sector, particularly warehousing and logistics, has been one of the strongest performers in Perth in recent years. This trend is expected to continue, as demand for storage space and distribution hubs rises, fueled by the growth of e-commerce and Perth’s position as a key trading hub in Western Australia.

Key Drivers to Watch in 2025

Several key factors will influence Perth’s property market in 2025. Investors, buyers, and sellers should keep an eye on the following:

• Interest Rate Movements: While interest rates are expected to remain relatively low for the time being, the RBA’s decisions regarding rate hikes will play a crucial role in shaping the affordability of borrowing. Even a small increase could have a significant impact on property prices and market sentiment.
• Infrastructure Projects: Major infrastructure projects in Perth, such as the METRONET rail expansion and the development of new residential communities, will drive demand for housing and property investments in certain areas. These projects are expected to boost accessibility, improve urban amenities, and stimulate economic growth.
• Government Policy: Both state and federal government policies will play an important role in the property market. Any changes to housing affordability schemes, taxation (such as capital gains tax), or foreign investment regulations could impact the market.
• Global Economic Factors: Global economic uncertainty, particularly in relation to commodity prices, inflation, and geopolitical tensions, could influence Perth’s economy and property market. Fluctuations in the mining sector, for instance, could directly impact property prices in certain areas of Perth, particularly those linked to resource industries.

Forecast for Perth’s Property Market in 2025

In summary, the Perth property market is expected to see moderate but consistent growth in 2025. Residential property will likely remain in demand due to population growth, low interest rates, and limited land supply, driving price increases. However, there may be challenges for certain sectors, particularly commercial office space, as remote working trends continue.

For investors, Perth presents an opportunity for capital growth, particularly in well-located residential areas and industrial properties. Buyers should remain cautious and consider long-term trends, such as infrastructure developments, before making significant decisions.

As Perth continues its economic recovery and diversification, the property market in 2025 will reflect these shifts, creating a dynamic landscape for all stakeholders. The key to success in the Perth property market will be understanding local conditions, staying informed on policy changes, and adapting to evolving market trends.

Currently, the city is providing reasonable value for properties, but it’s heading toward becoming overvalued. Looking ahead, we’re expecting growth in the range of 10 to 12 percent, but that growth is beginning to enter overvalued territory.

After that, we might experience a flat period. While it may not be a sharp downturn, property values could potentially drop by 10 to 20 percent in real terms over time.

What suburbs will have the strongest growth in coming years?

2025’s theme will be amenity. As interest rates invariably start to drop, homeowners will use this increased serviceability to grapple their way up the amenity ladder using the equity they’ve created over the last few years.

Whilst the lower quartile is not expected to drop in value, the buyer pool will move up the ladder at the expense of those areas that previously offered access and affordability, but not amenity. The ones to watch are Riverton, Willetton, North Beach, Mount Lawley, Wembley, Melville and Mindarie.

—————BOOK YOUR EXCLUSIVE 15 MINUTE ZOOM CONSULTATION————-

We offer a 15-minute no obligation consultation to existing property investors, first home buyers and small business owners who are looking at property investments, business and asset protection. To Book an Appointment simply click here and pick a time and date.

BOOK YOUR ZOOM APPOINTMENT HERE

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

The past few years have certainly been marked by instability, with numerous uncertainties affecting businesses, economies, and governments around the world. As we look ahead to 2025, there’s hope for greater stability, but it’s by no means a guarantee. From elections to tax changes and global policy shifts, there are several key developments that business owners and individuals alike should prepare for in the coming year.

An Election on the Horizon

Get ready for political ads infiltrating your social media, voicemail, and TV screens, as the 2025 federal election draws near. Expect opposing parties to pitch their agendas, with the opposition likely questioning whether you’re “better off” and the incumbents highlighting their achievements.

The 2025-26 Federal Budget has been brought forward to 25 March 2025, suggesting that the election could take place between March and May 2025, with the latest possible date being 17 May 2025.

Legislation in Limbo

While the Senate passed 32 Bills on the final sitting day of 2024, including several directly impacting businesses and financial interests, there are still two key pieces of legislation hanging in the balance:

1. $3 Million Tax on Superannuation Earnings
   A proposed tax of 30% on superannuation fund earnings over $3 million is set to begin in July 2025. However, the Bill enabling this tax is stalled in the Senate and is unlikely to pass before the election, meaning it could expire unless the next government chooses to revive it.
2. Instant Asset Write-Off for Small Business
   The $20,000 instant asset write-off for small businesses was extended for the 2024-25 financial year, but it was removed from the enabling legislation in the final days of Parliament. As a result, SMEs remain uncertain about tax treatment for assets they plan to acquire, especially given the potential return to the $1,000 threshold.

Tax and Super Changes

Several important changes to tax and superannuation will take effect in 2025:

1. Foreign Resident Capital Gains Withholding Changes
   From 1 January 2025, the capital gains withholding rate on property sales by foreign residents will increase from 12.5% to 15%, and it will apply to all sales of Australian land and buildings, regardless of the property’s value.
2. Superannuation Guarantee Increases to 12%
   The Superannuation Guarantee rate will rise from 11.5% to 12% on 1 July 2025, marking the final legislated increase.
3. Superannuation on Paid Parental Leave
   From 1 July 2025, superannuation will be paid on Paid Parental Leave (PPL) at the rate of 12%, providing additional contributions to eligible parents’ superannuation funds.

Interest Rates and Economic Outlook

Despite easing inflation in 2024, the Reserve Bank of Australia (RBA) remains cautious, with inflation still above the target range. The RBA is unlikely to make significant moves until inflation is sustainably within the 2% to 3% range. Several banks, including CommBank, ANZ, Westpac, and NAB, have forecasted potential rate cuts, with predictions ranging from February to June 2025.

Cost of Living Pressures

Australia’s economy grew at a mere 0.8% in 2024, the slowest rate since the COVID-19 downturn. The increase in living standards was lower than expected, and discretionary spending remained minimal. While personal income tax cuts and energy subsidies have helped, the cost of living is still under pressure, with mortgage costs rising and the economy reliant on government spending. The outlook for 2025 suggests slow and steady recovery.

The ‘Trump Effect’

With President-elect Trump set to take office in January 2025, his administration’s policies, including the imposition of tariffs on trade with Mexico, Canada, and China, could have significant global repercussions. For Australia, this could mean a slowdown in trade with China, our largest trading partner, which could affect the economy and regional stability. The uncertainty around trade relations and a potential trade war could also lead to a weaker Australian dollar.

Fuel-Efficient Cars: New Standards Take Effect

From 1 January 2025, new vehicle emissions standards will be enforced, requiring manufacturers to meet CO2 targets for all new cars they produce. While suppliers can still offer less fuel-efficient vehicles, they must balance these with more fuel-efficient or low-emission models to meet the targets. Failure to do so will result in penalties unless credits are generated or traded with other manufacturers.

Wage Theft Becomes a Criminal Offence

Starting 1 January 2025, employers will face criminal charges if they intentionally underpay employees, including unpaid wages or superannuation contributions. Employers convicted of wage theft could face penalties up to three times the amount of underpayment, with fines reaching up to $7.825 million.

Phasing Out Cheques

The Australian Government has announced a phased plan to end the use of cheques by 2029. While cheques have declined dramatically in use, banks are still required to accept them until the official transition ends. However, the move towards digital payments is unlikely to be reversed, and businesses will need to adapt to new payment methods as cheques become increasingly obsolete.

Cash Remains King – For Now

While digital payments have surged, the Australian Government is committed to ensuring that cash remains a viable payment method. Around 1.5 million Australians still rely on cash for in-person transactions, particularly in emergencies. Businesses are required to accept cash for essential items, with small business exemptions, ensuring cash continues to play a role in the Australian economy for the foreseeable future.

Card Surcharges

The issue of card surcharges continues to be a point of contention. While businesses can charge a surcharge for card payments, it must reflect the actual cost to the business of processing those payments. Overcharging or adding excessive surcharges could lead to legal consequences, so businesses should carefully monitor their surcharge practices.

Conclusion

As we step into 2025, businesses and individuals alike will need to stay alert to the shifting economic, political, and regulatory landscape. From potential changes in tax policy to global trade challenges and evolving standards in wages and vehicle emissions, there’s much to anticipate in the coming year. By staying informed and agile, Australian businesses can navigate these changes effectively and position themselves for long-term success.

—————BOOK YOUR EXCLUSIVE 15 MINUTE ZOOM CONSULTATION————-

We offer a 15-minute no obligation consultation to existing property investors, first home buyers and small business owners who are looking at property investments, business and asset protection. To Book an Appointment simply click here and pick a time and date.

BOOK YOUR ZOOM APPOINTMENT HERE

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

---

General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.