The Pros and Cons of Investing in Property Perth WA

While Sydney and Melbourne are pricing investors out, Perth is stepping forward as one of Australia’s most compelling places to invest in. But with strong growth already recorded, is it too late to jump in?

Driven by a resilient economy and a notable housing undersupply, the Perth market still offers an appealing entry point with median prices that provide investors with superior leverage and attractive rental yields. But like any investment, it comes with its own set of risks and challenges. 

Let’s take a closer look at the opportunities and considerations of investing in Perth real estate, plus the tips you need to make an informed financial decision.

Overview of the Perth Property Market

Perth is currently experiencing a dynamic market with strong capital growth and a historically tight rental market.

As of 2025, here’s where the market stands:

• Strong price growth: The Perth property market continues to outpace many other capital cities. Dwelling values have seen solid annual growth, with forecasts predicting continued, yet moderating, increases.
  • The median house price in Perth sits around $770,000, representing a substantial annual gain of 17.7%.
  • Unit prices have also shown strong growth (24.7%), as buyers seek more affordable entry points.

• Low supply and high demand: The number of total listings remains low, which is a big driver of price increases and quick sales. A significant housing supply shortage, intensified by population growth, keeps buyer competition fierce.
• Tight rental market: Perth’s rental market continues to be among the tightest in Australia, with a vacancy rate of 0.7% as of October 2025. This shortage puts continuous upward pressure on rents.

The Pros of Investing in Perth Property

Perth offers several compelling advantages for investors focused on both capital growth and cash flow. Let’s dive into the major advantages that this market has to offer.

Relative Affordability Compared to the East Coast

Perth remains one of Australia’s more accessible capital cities. This lower median price point means you don’t need a huge deposit to get started. Homebuyers and investors potentially gain more buying power, enabling them to acquire properties with solid value. It significantly lowers the barrier to entry.

Excellent Rental Yields and Low Vacancy Rates

The combination of relatively lower property prices and continuously rising rents has resulted in some of the best rental yields in the country, with Perth dwellings averaging a strong 4.9% yield. This historically low vacancy rate means you’ll secure a quality tenant fast, keeping those vacant periods and lost income to an absolute minimum.

Strong Economy and Growing Population

Western Australia’s economy is powered by the world’s ongoing demand for resources, providing stable, high-paying jobs. This combined with strong migration (both overseas and interstate), creates a massive, sustained demand for housing that won’t disappear overnight.

Infrastructure Development and Investment

The WA government has committed billions to infrastructure projects, including the Metronet rail extensions, such as the Yanchep and Byford lines. These upgrades improve connectivity and unlock new areas for development, stimulating economic activity and boosting property values in every surrounding suburb.

The Cons of Investing in Perth Property

A red-hot market is not without its challenges. For first-time buyers and long-standing investors, be wary of these potential drawbacks:

Affordability Constraints and Market Peaks

While still relatively affordable nationally, Perth’s rapid price growth means that affordability is starting to decline. The biggest risk is that the market’s initial sprint is over. If you buy late in this boom cycle, you risk paying an elevated price with reduced potential for quick, immediate capital gains.

Sensitivity to the Mining Sector

WA has always relied heavily on the resources sector. If global commodity prices take a dive or mining investment slows, it can send ripples through employment and housing demand, particularly in resource-adjacent areas. This introduces a layer of market volatility that investors need to be prepared for.

New Tenancy Law Changes

The WA government is actively reforming residential tenancy laws to improve renter conditions. As an investor, you must keep up with these evolving rules. They can affect landlord-tenant relationships, increase your compliance costs, and potentially reduce your flexibility as a landlord.

Management Challenges for Interstate Investors

For investors based on the East Coast or overseas, managing a property hundreds of kilometres away is a logistical challenge. While a great local property manager helps, the time difference and distance can complicate serious maintenance issues or tenant disputes.

Factors to Consider Before Investing

Making an informed decision means looking beyond the headlines. Here are some key factors to consider before committing to a property:

• Not all Perth suburbs are created equal. Focus on locations with proven demand drivers, such as new infrastructure (e.g., Metronet stops), proximity to employment hubs, desirable school catchments, and lifestyle amenities (like the coast).
• Determine your primary investment goal: Is it cash flow or capital growth? High-yield areas (often older properties or specific unit markets) will provide strong cash flow, while growth-focused areas (often near new infrastructure) may require more capital input but promise greater long-term appreciation.
• Research current and planned local and state infrastructure projects. A new road, hospital, or train station can fundamentally change a suburb’s desirability and drive years of price growth.

Tips for Making a Smart Investment

To ensure your property investment in Perth is not just luck, but a strategic success, these are some essential tips and best practices to adopt:

1. Conduct Deep Suburb-Specific Research

Avoid general market sentiment and drill down into the data for your chosen suburb. Analyse:

• Days on Market (DOM): Low DOM indicates high buyer competition and demand.
• Vendor discounting: Low or no discounting means sellers are getting close to their asking price.
• Rental demand metrics: Look for vacancy rates well under 3% to ensure quick tenant placement.

2. Focus on Demand and Scarcity

Target properties that are scarce and always in high demand. Scarcity is usually driven by two main factors: prime location and unique features. For houses, this often means larger land sizes, proximity to the beach or river, or properties in tightly held, established family suburbs.

3. Partner with a Local Expert

Engaging a local residential buyer’s agency is the most effective strategy for an investor, especially those residing interstate. A local expert can:

• Provide a genuine, ground-level assessment of the suburb and property value.
• Identify hyper-local value pockets, street orientations, or specific school zones missed by interstate investors.
• Source off-market opportunities not yet listed online.
• Negotiate the best possible price on your behalf, often saving more than the agent’s fee.
• Conduct thorough due diligence, including building and pest inspections.
• Ensure compliance with the latest WA residential tenancy law reforms from the settlement date.
• Recommend trusted local property managers and settlement agents.

Conclusion

Investing in property in Perth, WA remains an exceptionally attractive opportunity for property investors, driven by a rare combination of national affordability, high rental yields, and population-driven housing undersupply. 

While the market’s explosive growth is slowing, the fundamentals for sustained, strong performance are still driving the market forward. Success here will depend on strategic, targeted investing. This means narrowing down suburbs with new infrastructure and solid demand before the general market catches on.

Ready to seize the opportunities in the high-growth Perth market?

At InvestorKit, our local Perth buyer’s agents are committed to helping you source your dream property before the next price surge. Schedule a free discovery call now to get started.

FAQs

Is Perth a good place to invest in property?

Perth is currently considered one of the most profitable capital cities in Australia for property investment due to its strong capital growth potential and excellent cash flow driven by high rental yields and low vacancy rates.

What suburbs in Perth offer the best investment opportunities?

The best suburbs fall into two categories: high-performing areas like Currambine and Maida Vale offer strong capital growth with established amenities, and affordable hotspots like Girrawheen, Rockingham, and Merriwa, which provide a more affordable entry point, offering superior cash flow and rapid growth potential.

Should I invest in houses or units in Perth?

The choice depends on your financial goals. Houses offer the strongest potential for long-term capital growth due to land scarcity, while units provide stronger immediate cash flow due to lower entry prices and high rental yields.

What are the rental yields like in Perth, WA?

Perth boasts some of the highest rental yields in the country, with gross yields typically hovering around 4.8% for houses, outperforming many East Coast markets.