Weekly Summary
- Perth prices surged again, rising by 0.36 per cent last week.
- Median house prices have now climbed to $822,001, up by $37,000 in 2025.
- Listings have fallen below 3,000 for the first time in decades, while sales remain steady around 830 per week.
- The Federal Government’s expanded 5 per cent deposit scheme has sparked debate, with some modelling showing it could leave first-home buyers worse off.
Weekly Report
The last week of Winter brought some stormy weather, but Perth’s property market continued to shine. Prices rose by 0.36 per cent, the most significant weekly gain this year. As shown in Figure 1, August delivered a string of strong results, creating a solid foundation as we move into Spring. The key question is whether the undersupply of established dwellings will sustain this growth, or if price momentum will fade, as it did last Spring.
So far in 2025, prices have increased by 4.6 per cent. This has pushed Perth’s median house price to $822,001, a $37,000 increase since the start of the year. Figure 2 plots a non-linear projection of approximately $880,000 by the end of the year, equivalent to a $95,000 annual gain. However, reaching this projection would require price growth to accelerate further, and while the growth over Winter is elevated, it appears more consistent than accelerating. This is potentially due to fewer-than-expected interest rate cuts during mid-year.
To demonstrate this point, Figure 3 isolates the median price trend since the beginning of Winter. It shows that since June, the median house price has tracked almost perfectly along a linear path. Based on this trend, a more plausible projection sits at around $850,000. Nevertheless, this would still equate to an annual gain of approximately $65,000.
Figure 4 tracks the moving average of weekly price growth, which has trended upward throughout 2025. The average should cross the 0.15 per cent threshold (blue line) by the end of September, translating to an 8 per cent annual growth, while the projected 0.20 per cent growth equates to an annual increase of 11 per cent. However, like the median house price projection of $880,000, this would require growth to continue accelerating, so the final figure is likely to be around 9 per cent, an excellent year for property owners, particularly considering the soft start to the year.
Despite fewer interest rate cuts than initially anticipated, the real driver of price growth remains the extreme undersupply of established homes. Last week, listings fell to just 2,981 properties across Perth, a figure so low that most real estate professionals cannot recall similar conditions.
Demand, on the other hand, remains steady. Perth recorded 830 transactions last week, within its long-term weekly range of 800 to 1,000. The combination of tight supply and stable demand continues to put upward pressure on prices.
Figure 5 shows the sales-to-listings ratio is firmly in favour of sellers, now sitting at 28 per cent. For comparison, the ratio in 2019 was just 4 per cent, reflecting a strong buyer’s market. This marks one of the most dramatic shifts in Perth’s housing history and reinforces the current seller-dominated conditions.
There are some signs of a modest recovery in new housing supply. WA is currently recording approximately 5,500 dwelling commencements and completions per quarter, a level last seen in 2017. July saw more than 1,900 dwelling approvals, which implies around 5,700 approvals per quarter. This suggests a steady pipeline of new homes being added to the housing stock.
We will have a clearer view in the coming weeks when the March quarter population figures are released, allowing us to evaluate whether supply is catching up with demand.
To finish, I would like to comment on the Federal Government’s expanded Home Guarantee Scheme (HGS), which enables first-home buyers to purchase with a 5 per cent deposit, generating significant discussion. The appeal is clear: avoid saving a 20 per cent deposit and bypass Lenders’ Mortgage Insurance (LMI), which adds significant cost to a loan.
However, modelling by Lateral Economics suggests the scheme may ultimately leave buyers worse off. On a $700,000 home, the scheme might save between $21,000 and $28,000 in LMI but could also drive up prices by $37,100 to $69,300. This would leave buyers effectively behind by $16,100 to $41,300.
Other estimates support these concerns: Treasury expects a modest 0.5 per cent price rise, but this is an average across the entire housing market; The Insurance Council of Australia projects a 3 to 6 per cent increase for typical first-home buyer properties. This reinforces a key point: in a market where supply is constrained, policies that boost demand, no matter how well-intentioned, tend to push up prices. Without increasing housing supply, demand-side subsidies risk harming the very people they are designed to help.
To conclude this week, Perth’s property market is hot and closed out Winter with strong momentum. Weekly price growth is rising, the median house price is climbing, and the city is experiencing record-low listings. While Spring often brings an increase in supply, we will have to wait and see. Sales are steady, demand remains resilient, and there is little to suggest a slowdown is imminent.
Whether growth accelerates or levels off will depend on how the Spring market unfolds, particularly in terms of new listings and further interest rate cuts. Nevertheless, based on current trends, Perth’s market continues to lean heavily in favour of sellers, with further price gains on the horizon.
Reproduced with permission from:
Ryan Brierty,
in house economist from Michael Keil @ michaelkeil.com
