Michele Bullock, governor of the Reserve Bank of Australia (RBA), at the AusPayNet Summit in Sydney, Australia, on Tuesday, Dec. 12, 2023. Australia’s central bank expects to launch a “holistic review” of the country’s retail payments regulation once reforms that allow it to regulate buy-now-pay-later and mobile wallet providers come into effect next year, said Bullock. Photographer: Brent Lewin/Bloomberg
Perth’s property market is experiencing a significant boom, with forecasts indicating that property values could rise by nearly 11% this year. According to a new report by ANZ (Australia and New Zealand Banking Group), newly minted property millionaires in the region may see their wealth increase by as much as $100,000 within the next 12 months. This projection marks a notable revision from earlier estimates, reflecting a growing confidence in the local market.
The anticipated rise in property values is primarily driven by Darwin, which is expected to see an increase of 13.7%. In comparison, other major cities are forecasted to experience modest growth, with Sydney at 2.5%, Melbourne at 2.1%, and Brisbane at 9.5%. Perth’s median house price is now approximately $1 million, surpassing Melbourne‘s figure of $989,000. This surge in prices highlights the disparity in the property market, particularly for first-time homebuyers.
Challenges for First-Time Home Buyers
The good news for property owners in Perth stands in stark contrast to the struggles faced by prospective first-time buyers. As property values climb, many are finding it increasingly difficult to achieve the Great Australian Dream of home ownership. The average loan for a new home currently sits at approximately $633,000, amidst rising interest rates that complicate the financial landscape.
In a recent statement, Sally Tindall, the data insights director at Canstar, acknowledged the challenges ahead. “This year will be an uphill battle for first home buyers, who’ll not just have to save more for a deposit, but also earn more to qualify for a larger loan at higher rates,” she said. With the Reserve Bank of Australia recently raising the cash rate target by 25 basis points to 3.85%, the financial pressure on first-time buyers is expected to escalate.
Rental Market and Housing Demand
The situation is equally concerning for renters in Perth. Data from the Real Estate Institute of Western Australia (REIWA) revealed that the median rent for a house surged to $725 per week in January, representing a 6.6% increase compared to January 2025. Additionally, the availability of rental properties has decreased, with only 2,087 listings currently on the market, down 3.2% from the previous year.
The demand for rental properties remains high, driven by ongoing population growth and limited options in both new and established homes. Suzanne Brown, the head of REIWA, noted that while the rental market has shown some improvement due to increased supply, challenges persist. “We are not out of the woods. These factors are maintaining strong demand for rental property,” she stated.
As Perth’s property market continues to thrive, the outlook for first-time buyers remains bleak. The increasing prices and rental rates necessitate thoughtful intervention from both state and federal governments. Tindall emphasized the need for initiatives to stimulate new housing construction and policies aimed at ensuring first home buyers are not overshadowed by investors.
“It’s crucial that both the state and federal governments look harder for solutions,” Tindall concluded. In the meantime, those aspiring to enter the housing market may need to consider practical strategies, such as opting for smaller or more affordable properties, to avoid overextending themselves financially.
