Perth’s median house value has surpassed Melbourne’s for the first time in over ten years, a significant shift that highlights the volatility of Australia’s real estate markets.

A reversal of what many believed to be the natural order of our central cities, Perth’s median price now stands at $787,000, slightly above Melbourne’s $782,000, according to the most recent PropTrack Home Price Index (May 2025).

The fact that properties in different states have varied compositions is not taken into consideration by general “home price” indices. For instance, flats makeup over 30% of all homes in Melbourne, whereas this number is substantially smaller in Perth.

Perth’s median property price, which was at A$787,000 as of May 2025, was more than Melbourne’s, which was A$782,000. This milestone underscores Perth’s growing appeal to both homeowners and investors, marking a significant shift in Australia’s real estate market. Perth was once thought to be a more affordable market, but it is now becoming a high-growth challenger due to strong demand, a shortage of available properties, and population expansion, especially in desirable locations like the Swan Valley.

Perth’s excellent rental yield performance is one of the main things attracting investors. With gross rental returns that often surpass 4.3% to 4.5% and are significantly higher than those in the eastern states, Western Australia now leads the nation. These high yields imply that Perth real estate is providing outstanding returns about purchase prices, which makes it especially alluring to investors looking for chances with positive cash flow.

• A value of 1.0 indicates price parity between Perth and Melbourne.
• Values below 1.0 suggest that Perth prices are lower than Melbourne.
• The chart spans from 2015 to 2025, showing a notable recovery trend beginning around 2020.

Core Investment Strategies

Perth’s excellent rental yield performance is one of the main things attracting investors. With gross rental returns that often surpass 4.3% to 4.5% and are significantly higher than those in the eastern states, Western Australia now leads the nation. These high yields imply that Perth real estate is providing outstanding returns about purchase prices, which makes it especially alluring to investors looking for chances with positive cash flow.

Generally speaking, houses have high rental returns but somewhat sluggish capital growth. They appeal to investors seeking long-term stability and steady rental income.

Apartments and units, on the other hand, have seen a stronger growth trend, with prices over 20% higher this year and a median of about A$525,000.

The reasons for this rise include affordability, urban demand, and changing consumer tastes, particularly in well-connected or inner-city locations. According to sources like NAB, Smart Property Investment, and the Australian Property Alliance, the popularity of units has increased.

This matrix shows that while houses are income-generating assets, units offer more aggressive growth potential, appealing to investors targeting equity gains over time.

Location remains a key factor in yield and growth. Suburban areas with limited supply, such as Joondalup, Bayswater–Bassendean, and Fremantle, are expected to experience development of more than 10% by 2025.

Due to limited supply and improved infrastructure, demand is rising in specific locations (Loan & Finance Brokers, Courier Mail, Daily Telegraph).

Additionally, as better connections increase their value as an investment, areas close to future Metronet stations—such as Canning Vale, Nicholson Road, and Ranford Road—are likely to appreciate (Wikipedia). These areas are excellent prospects for short-term capital growth as they mix accessibility with growing demand.

Practical Tips for Maximising Returns

Making wise, well-informed decisions at every stage of the investment cycle is more important for maximising returns in real estate investing than just purchasing real estate. Here are four doable strategies to improve the performance of your portfolio:

Buy Below Market Value or at Discounted Offers

• One of the golden rules in property investment is simple: buy low, sell high. Bargoti Real Estate frequently secures early access to pre-launch and off-market deals, enabling investors to acquire properties at below-market prices.
• These discounted opportunities, often unavailable to the general public, allow immediate equity gains and improved long-term profitability. (Sources: Instagram, LinkedIn)

Leverage New Infrastructure Developments

• Property values are heavily influenced by surrounding infrastructure. Areas near major transport projects, such as the Thornlie–Cockburn Link, are set to experience an increase in both demand and prices.
• Similarly, civic redevelopments such as Civic Heart (South Perth) and the Carillon City precinct enhance lifestyle appeal and future capital growth. Proximity to these projects gives investors a competitive edge. (Sources: Wikipedia)

Target Undersupplied Submarkets

• Investing in low-supply, high-demand suburbs—referred to as “armour-coated” markets—can yield substantial returns.
• These areas often resist market downturns and recover faster due to their scarcity and continued demand.
• Suburbs flagged for growth by publications like Courier Mail offer a strong starting point for identifying such opportunities.

Optimise Holding Costs

• Reducing vacancies and improving rental yields are crucial to maintaining positive cash flow.
• Bargoti’s management services help landlords by minimising time-on-market, ensuring high occupancy rates, and suggesting targeted property improvements that enhance rentability and tenant retention.

Together, these strategies form a practical blueprint for any investor aiming to maximise property returns in today’s competitive market.

Analytical Table: Houses vs Units

Step-by-Step Investor Action Plan

Begin by defining your investment timeline, expected rental yield, and the right balance between capital growth vs. passive income. Whether you’re aiming for long-term equity or short-term cash flow, clear goals drive more intelligent decisions.

Identify high-potential suburbs with strong fundamentals—look for areas with:

• Vacancy rates below 1%
• Annual price growth of 15–20%

Examples include Dayton, Swan View, and South Perth, all of which demonstrate strong demand and growth resilience.

Secure loan pre-approval early and stay updated on interest rate movements. With the RBA expected to cut rates in 2025, conditions may favour buyers. (Sources: Daily Telegraph, Reuters, Courier Mail)

With Bargoti Real Estate, receive a shortlist of 3–5 properties aligned to your goals. Each option is assessed for:

• Capitalisation rates (CAP)
• Growth potential
• Proximity to infrastructure projects (e.g., Metronet)

Negotiate strategically. Leverage Bargoti’s network to access off-market deals and secure properties below median market rates.

Conduct a pre-inspection and implement rental-ready improvements. Forward the property to management for immediate listing and tenant onboarding.

Ensure continuous performance through:

• Quarterly rent reviews
• Maintenance checks
• Annual portfolio health assessments

Conclusion

Perth’s property market remains a standout, high-performing and resilient investment environment. It presents a compelling blend of:

• Above-average rental yields of approximately 4.5%, providing consistent cash flow.
• Strong capital growth potential, with top-performing suburbs delivering 10–15%+ annual increases.
• A low housing supply, combined with robust infrastructure development—including projects such as Metronet and civic precinct upgrades—further fuels price momentum and buyer confidence.

For investors seeking long-term stability, income, and value appreciation, Perth remains one of Australia’s most attractive markets.

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