Whether the current market is cooling (slowing down significantly), correcting (adjusting from excessive levels), or still ascending (entering additional expansion) is an essential question for a Perth investor (or someone coaching investors through Bargoti Real Estate). Timing, suburb selection, buyer/investor type, and risk tolerance all affect strategy. Perth’s residential market has been among the strongest in Australia in recent years, driven by migration, low vacancy rates, and rapid price increases. However, several signs now point to a change, including growing listings, affordability difficulties, and investor activity reaching high shares.

Perth offers a complex picture, with pockets of heat, signs of moderation, and unmistakable reasons for optimism driven by strong macro-drivers, supply constraints, and investor interest. Let’s examine the current state of Perth’s real estate investment market in this blog.  

Understanding the fine print is crucial for Bargoti Real Estate’s Australian investor clients, since these days a successful investment depends more on the type of property, the location, and the plan than on the catchphrase “Perth property.”

Bargoti Real Estate examines the mechanics of real estate investor activity in today’s Pulse

• Nationwide, new investor loans have increased by a robust 18.8%, significantly exceeding the number of investment properties entering the market.
• The quantity of investor listings entering the market varies by area; it is higher in Tasmania, Victoria, and NSW but lower than average in SA, QLD, and WA.
• High capital-growth jurisdictions have the highest volume of new loans for the acquisition of investment properties, indicating a shift in investment towards SA, QLD, and WA.
• With fewer leveraged investors and more first-time homebuyers joining the market to climb the real estate ladder, investor types may be shifting.

Australian home investment in 2024 has two primary narratives that are at odds with one another.

• One is that real estate investors are abandoning the market. High borrowing rates, tenancy reform, and higher property taxes have deterred current investors.
• However, the number of investment buyers is increasing. According to ABS data, the number of investor loan commitments in the year ending in September was approximately 212,500, up 18.8% from the previous 12-month period, and RBA data indicates that investor housing credit has grown significantly.

Changing Tides in the Perth Market

1. The population of Perth, WA, has grown significantly, particularly since the epidemic. The resources-led economy and the influx of foreign and interstate migrants have increased demand for both rentals and purchases.

2. Concurrently, there has been a slowdown in the supply of new housing: building permissions have increased, but completion rates are still slower. The combination of constrained supply and growing demand presents opportunities for both capital gain and rental return for an investor-focused company like Bargoti.

• Listings are still scarce. For example, only about 4,000 residences were advertised for sale in Greater Perth in June 2025, according to one report (compared to about 13,500 needed for a “balanced” market).
• Similarly, several suburbs still have low median days on market (13–16 days), indicating seller’s market conditions despite a slight relaxation from high levels.
• Perth has seen significant price increases, including a 21.4% rise in unit prices and a 24.2% increase in median home prices in 2024.   
• For the first time in ten years, its median home value (~$787,000) surpassed Melbourne in May 2025. However, this sudden price increase raises affordability concerns, which could prevent future escalation.
• Rental growth has been robust, and vacancy rates have been incredibly low (less than 1% in specific measurements).   
• Investors looking for cash flow find Perth appealing because yields remain competitive compared to many capital cities in the eastern states.

3. Resources, agriculture, exports, and increasingly developing industries are the key drivers of employment and migration in WA, which, in turn, fuels demand for housing.From Bargoti’s perspective, this indicates that while there are no guarantees, the fundamental basis is comparatively substantial (not just a speculative bubble).

Key Metrics for the Investor Market

Here are the key metrics an investor should consistently monitor:

• Median house/units price ~ $745,000 at the end of 2024.
• Annual growth rate – fast growth (20%+) signals strong momentum; slowing to single digits signals moderation. Price growth forecasts for 2025 of 5-10%.
• Listings/days on market – more listings + longer days indicate cooling; fewer listings signal a tight market, listings ~4,000 vs balanced ~13,000.
• Vacancy rate / rental growth/yields – for investors, strong rental fundamentals matter as much as capital gain., yields ~4.6 — 4.8% in June 2025.
• Investor share of purchases – a high investor share may signal speculative pressure or heightened risk of oversupply , investor transactions ~36% in Perth.
• Supply of new dwellings, especially greenfield land and approvals – a rising supply pipeline can slacken price pressure, completing trailing approvals.

By tracking these metrics, Bargoti Real Estate can position clients to act either opportunistically or cautiously, depending on the signals.

Cooling, Correcting or Climbing? Where Does Perth Stand?

Let’s define the three states and then assess Perth’s position:

1. Climbing

• Significant (double-digit) price increase, low supply, significant rental growth, tight vacancies, high investor activity, and few days on the market are its defining characteristics. The market is fuelled by momentum.
• Over the last 12 to 24 months, PERTH has demonstrated several of these characteristics.

2. Correcting

• Listings start to increase, days on the market lengthen, yields may tighten, the market slows from prior highs, growth moderates to single digits, and some suburbs may overshoot—a “cool-down” from peak rather than a crash.
• Keep an eye on include investor shares tipping into speculative excess, growth changing from 20%+ to 5–10%, and price softening in some suburbs.

3. Cooling

• A more severe slowdown would be characterised by negative or extremely low growth, increased supply, higher vacancy rates, pressured yields, and longer days on market.
• It may be a sign of a market where capital appreciation stagnates or reverses, and investment gains become more difficult.

Where does Perth currently sit?

Perth is somewhere between Climbing and Correcting. It is not yet in a complete Cooling phase, but the extraordinary momentum is moderating.

1. Supporting Evidence for “Climbing”

• Strong migration, supply constraints, and low listings still indicate upward pressure.
• Rental yields remain attractive, and vacancy rates remain very low in many suburbs.
• Forecasts of further growth (5-10% in 2025) from credible sources.

2. Supporting Evidence for “Correcting”

• Growth rates have moderated: e.g., quarterly growth in April 2025 of only ~0.7%.
• Listings and days on market are creeping upward: median days ~15-19, listings rising somewhat.
• The investor share is high (~36%), raising concerns about saturation in certain suburbs.
• Some commentary: “Some areas may be running too hot, particularly lower-priced suburbs where investors already have been active.”

3. Why not fully “Cooling”

• The market still shows clear upward momentum and structural demand (supply shortfall + migration).
• Yields and vacancies remain healthy (not under significant stress).
• No broad evidence yet of widespread price declines or stagnant markets across all suburbs.
• Bargoti Real Estate should treat the Perth market as maturing — the “easy gains” of sudden 20%+ growth may be behind, but upside remains, though selection and timing become more important.

Investor demand appears to be higher than investors “exiting” the market at a high level

1. Comparing the number of secured home investment loans issued by the ABS with the number of new listings of investment properties for sale provides additional insight into investment purchases and sales.

2. By calculating the number of properties listed for sale that have previously been advertised for rent, the data serves as a proxy for properties surrendered by investors.

3. In contrast, ABS data serves as a rough proxy for investment acquisitions. The measure does not include market sales and rentals, nor does it account for investors who leave the market by buying their own investment property.

4. Investor-inferred listings have been increasing since March of this year, reaching 13,000, but they are still far below the November 2021 record. Even short-term investment residences were making a healthy profit in November 2021, when selling conditions were highly favourable and national home values had increased by about 25% in just one year.

5. The number of new loan commitments is nevertheless high at 18,400, as investment listings remain below recent highs. 14,516 was the month’s five-year average. The decrease in total investor listings through October, which also peaked in November 2021, may have been driven by high demand for investment purchases relative to investor selling.  

For investors, it’s not just about the location

1. Due to the significant shifts in Australia’s economy over the past few years, both the types of properties that investors purchase and the types of investors in the market may be evolving. The RBA noted that investors with lower leverage might be replacing those with higher leverage.  

2. Although the underlying quantity remained extremely low in September 2024 (711 loans), ABS loan data also indicates that the percentage of first-home buyer loans for investment purchases has increased.

3. This could be because some first-time homebuyers see an investment property as a more cost-effective way to get into the housing market. There has been a slowdown in new loan commitments since April, despite the national trend showing a robust increase in investment activity over the last year.

4. The amount of new investor loans will further soften towards the end of 2024.

This may be connected to the scarcity of reasonably priced investment opportunities with significant potential for capital growth, following a period of rapid development across properties at lower price points.

5. Interest rate reductions may already be priced into some strong growth pockets, given the possibility that rates could stay higher for longer than expected. However, this is more likely to lead to a decrease in new investment purchases nationwide than an increase in investor selling as long as the cash rate stays steady.

6. Given the assessment above, here are the key implications:

• If you build your strategy assuming 20-30% annual appreciation, you’ll likely be disappointed; targeting 5-10% (or even 4-6% in some suburbs) may be more realistic.
• With broad-based volume growth harder to achieve, differences will arise from choosing the right suburb (strong infrastructure, amenity, supply-constrained) and property type (high yield, low vacancy risk).
• With capital gains growth moderating, rental yield and rental growth become more critical to returns.
• In areas where investor share is high, growth has already occurred, and supply is increasing, returns may start to weaken or stagnate.
• In a slower-growth environment, patience and a long-term view matter more; flipping for quick gains is riskier.
• With interest rates elevated and the cost of debt still significant, a cash flow buffer is essential.

For Bargoti Real Estate:

• Position your messaging around “smart investment in a mature market” rather than “booming market.” Educate clients that growth remains, but it is more selective.
• Provide suburb-specific intelligence — Highlight where in Perth the fundamentals remain strong (supply constraints, future infrastructure).
• Offer portfolio diversification advice—suggest mixing capital-growth and yield-oriented zones.
• Show where markets may be stretched (e.g., some outer-suburbs, newly overbuilt units) and flag caution.
• Since the rental market is still strong, helping clients maximise rental returns, manage vacancies, and manage maintenance are key services.
• Monitoring new developments, zoning changes, and land‐release programs can provide early warnings of where supply may impact returns.

Why are regional variations significant?

1. With higher levels of new investment loans in high-growth markets and more investor listings in low-growth markets, the ratio of new investment purchases to current investment sales varies by state.

2. ABS loan commitments for investments increased 18.8% nationally in the year ending in September 2024; however, NSW, QLD, and WA accounted for the majority of this growth.

3. High capital-growth locations have seen the most growth in investment loans over the course of the year, and this investment activity closely tracks changes in value. The annual increase in investor loans was only 5.1% in Tasmania and Victoria, two states where values have been declining.

4. Additionally, the pattern of new investment listings is varied. In October, Victoria saw almost 3,800 new investor listings, up 10.6% from the previous five-year average and making about 29% of the national total.  

5. In SA, QLD, and WA, where home values have been proliferating, investor listings were below the historical average. The data on investor loans and listings is broken down by state, demonstrating that not all states exhibit the national trend of significant investor purchases relative to sales.

6. The data in Victoria confirms the national trend and the narrative that a comparatively large number of investment homes are being listed for sale. In contrast, the number of new investor loans acquired is relatively low when compared to prior years.

7. In addition to high interest rates, Victoria’s capital growth is slow, and investors’ holding costs have gone up since the beginning of 2024 due to a lower land tax threshold.

8. Although investment property taxes in Tasmania have not changed significantly in 2024, some investors may be leaving due to declining home values and rising interest rates. Tasmania saw 10.3% more new investment listings in October than the previous five-year average.

10. It’s interesting to note that NSW investment listings were also 7.2% above average; however, a decline in investment properties across the state is likely being offset by fresh investor demand.

Other features of Perth’s current market

1. Due in part to a lack of construction in previous years, Perth is experiencing a housing scarcity.  Rental pressure has increased due to incredibly low vacancy rates.  

2. Yield profiles are supported by rising rents and lower entry prices compared to the east. WA is attracting more interstate migrants, boosting buyer demand, particularly from the east.  

3. Analysts predict additional growth of 5–10% in 2025, albeit at a slower rate than the explosive increases of 2024, with some caution over macro risks. Naturally, there are challenges to this impressive run. Interest rate increases, tighter lending, overshooting in some precincts, and macro shocks that could disproportionately affect resource-driven economies are among the potential obstacles.

East coast vs Perth: Where they diverge (and converge)

There are differences and lessons to be learnt when comparing Perth to capital cities on the east coast, such as Sydney, Melbourne, Brisbane, and even Adelaide.

1. Relative worth and affordability

• Perth is still less expensive than Sydney and, until recently, Melbourne, despite its recent robust growth.  
• Because of its affordability, investors and owner-occupiers looking for value can more easily access it.   
• In the meantime, some forecasts indicate that Sydney and Melbourne will either fall or grow at a flat rate in 2025, with Perth possibly leading the way.  
• For example, SQM predicted that Perth would experience the most significant increase in 2025.

2. Growth drivers differ

• Infrastructure, employment in the service and technology sectors, and population growth (including international migration) are significant factors driving East Coast markets.
• There are also serious affordability issues and home supply bottlenecks in many of those markets.
• Perth provides another lever: the state’s commodity-driven economic cycles and the resources industry.
• Therefore, compared to the Big East, Perth’s upside is more dependent on WA’s macro fortunes.

3. Cyclical risk and volatility

• East coast markets, particularly those in Sydney and Melbourne, tend to fluctuate more violently in response to global investor sentiment, credit cycles, and monetary policy.
• With a more resource-cycle overlay, Perth might lag early in a downturn but could also surprise on the upside when circumstances are right.

4. Potential for catch-up and rating

• Perth’s current run is partly a “re-rating” rather than pure organic growth, according to one of the myths about the city: that it was underrated for so long.
• In contrast, future gains typically depend more on tight fundamentals (supply, zoning, infrastructure) than on a value re-rating, because many East Coast markets are already highly priced and have little room for multiple expansion.

Although no one can truly predict the future, this scenario will continue to spur growth for many years to come based on prior experiences.  Based on our assessment of the current state of affairs, customers will eventually grow weary, serviceability will become a problem, and growth will progressively slow.

When this happens, the bottom end of the market—where 5% deposits on subpar assets that were bought in a hurry—will be the most vulnerable.  Any shift will have less of an impact on the middle to top end.

Conclusion

Is Perth’s investor market cooling, correcting or climbing?

It is climbing, but at a more tempered pace — effectively moving into a correcting phase. The days of double-digit, fast growth across all suburbs are largely behind us; what remains is a market with strong fundamentals, but one where choice, timing and strategy will determine outcomes far more than broad market momentum.

For Bargoti Real Estate, the opportunity lies in guiding investors to resilient zones, steering them clear of overheated or oversupplied suburbs, and emphasising yield, hold strategy, and asset quality.

Yes, Perth remains a compelling market — but success now demands a smarter, more discriminating approach.

DISCLAIMER – The information and opinion provided is for guidance and general informational purposes only. The sole intention is to provide general understanding of the subject matter so the readers can assess whether they need more detailed information. The information provided on this website should not be regarded as a financial, business, legal or real estate advice and it is strongly recommended that the readers should seek their own independent financial, business, legal or real estate advice. While every effort has been made to ensure that the information and the material is correct and up to date at the date of publication. However, we do not guarantee or warrant the accuracy or completeness of the information provided as the factors like changes in circumstances after the time of publication, may impact such accuracy or completeness. Bargoti real estate will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.