What were Perth’s most in-demand suburbs in 2024?
Perth is predicted to lead the nation once again in house price growth, with Domain forecasting a lift of up to 10 per cent in the new year.
The prediction comes off the back of a 21 per cent gain across the year which saw house prices hit a record high just shy of $900,000.
Perth house prices have recorded double digit growth this year.Credit: Getty Images
Despite relentless cost-of living pressures and a cash rate that remained higher for longer than many had hoped, the Perth housing market demonstrated remarkable adaptability and strength, according to Domain chief of research and economics Nicola Powell.
Powell tipped prices would continue rising in 2025, albeit at a slower pace than in 2024, due to affordability pressure, chronic undersupply of housing s and more buyer options, giving homebuyers greater leverage as the year unfolds.
“Australia is likely to experience a tale of two halves in 2025,” she said.
“The first half will be weaker as the dynamics of 2024 carry over, while the second half should see a rebound, with the RBA potentially moving to cut the cash rate, which would serve as a strong catalyst to drawing more buyers back to the market,” she said.
Powell said cash rate cuts would shape the 2025 housing market with stretched affordability and limited borrowing power capping buyers’ ability to secure a home.
“An interest rate cut or targeted stimulus measures could trigger a wave of demand and spark price growth as the housing market responds to this newfound momentum,” she said.
“It may take one or two rate cuts to motivate buyers into action, and the timing of these cuts will shape market dynamics in 2025, perhaps creating a year of two halves, with a weaker first half and a stronger second.”
Casting an eye over the most in-demand suburbs this year in Perth, most were located on the outskirts of Perth led by Gidgegannup, then Chidlow, Serpentine, Kingsley and Bedfordale.
Nationally, South Lake was the suburb with the quickest sales, averaging nine days.
According to Domain, Perth home buyers are after something a little different – a shed. It was one of only two capitals where sheds ranked among the top search keywords, the other being Darwin.
A workshop was also a priority, with Perth the only city where this term appeared in the top 10 keywords.
Searches for “view”, “waterfront”, and “beach” have all risen through the rankings, showcasing a stronger focus on lifestyle and scenic living.
Conversely, new has dropped significantly in popularity, falling to 17th from fourth place last year, possibly indicating a shift away from turnkey home preferences and high construction costs.
Property commentator Gavin Hegney said the city was currently offering fair value for properties, but was on its way to being overvalued.
“The house price growth that happens from now onwards is starting to get into overvalued territory,” he said.
“We may see a flat period on the back end of this, which may not be a bust, but in real terms over a period of time, they might drop 10 or 20 per cent.
“The emotional cycle of the market, that fear of missing out, paying above asking price and getting a property at any price, has already passed.
“So from here, we’re seeing fundamental growth, but not at the euphoric phase.”
Hegney said when interest rates fall it would be the middle ring suburbs that benefited from house price growth.
“That’ll increase borrowing capacity for the people who are looking to trade up in the mid-range with properties priced from $1 million to $2 million,” he said.
Domain’s forecast is in line with the big four banks. NAB’s latest forecasts expect home values across the capital cities to increase by 4.2 per cent next year. Westpac is forecasting a 3 per cent increase, while ANZ is tipping an increase of between 5 per cent to 6 per cent across all homes in Australia next year.
ANZ senior economist Adelaide Timbrell said it would be driven by mid-sized cities in Australia.
“We’ve seen a population boom in the mid-sized cities in Aus, so in Brisbane, Adelaide and Perth, that’s created huge momentum in housing markets,” Timbrell said.
“The number of people who want homes have far outpaced the number of homes being built.”
Ray White chief economist Nerida Conisbee concurred prices would likely continue to rise in most suburbs of Perth next year, although the rate of growth would slow.
“There are a few things happening - a sharp slowdown in the eastern states is likely impacting sentiment, particularly for interstate investors who have been very active,” she said.
“We have also seen a slowdown in iron ore price growth and lithium prices have fallen - mining is such a big driver of pricing in Perth.
“The final factor is the high degree of uncertainty we are seeing globally, particularly the US election result. Trump has a strong tariff agenda which could lead to a significant slowdown in China’s economy which has implications for the WA economy and by its property market.”