23/10/2025
Prices continue to climb due to strong demand and a lack of supply.
Listings are the lowest they have been in over 15 years. So what are the underlying drivers (Why demand is so high)
The low stock situation is exacerbated by surging demand from:
· Population Growth: WA is experiencing its highest levels of interstate and overseas migration in years.
· Investor Return: After a long downturn, investors are returning to the market for strong rental yields and capital growth prospects.
· Limited New Supply: The rate of new home construction has not kept pace with this population surge, creating a chronic underlying shortage.
A key factor worsening the low stock situation is the hesitation of potential sellers themselves. Here’s how this creates a damaging bottleneck:
· Fear of Becoming a "Buyer" in a Starved Market: Many homeowners who would normally sell are holding back because they are afraid they won't be able to find and secure a suitable property to purchase next. They see the intense competition, rapid sales, and lack of choice and decide to stay put.
· The "Trade-Up" Dilemma: This is especially true for those looking to upgrade (e.g., from a unit to a house, or to a larger family home). The fear of selling their current home quickly and then being stuck as a powerless buyer—potentially facing homelessness or having to settle for an unsuitable property—outweighs their motivation to move.
· Creating a Vicious Cycle: This hesitation directly reduces the number of existing properties coming onto the market. Each potential vendor who decides not to list is one less property for sale, which further tightens supply and intensifies the competition that caused their fear in the first place. It’s a self-perpetuating cycle.
· The Result is a Frozen Middle: The market loses a crucial layer of "churn"—the normal turnover of established homes. This bottleneck severely limits options for everyone, from first-home buyers to growing families, locking up the housing stock and making the inventory problem even more acute than it would be otherwise.
In short, the very fear generated by a low-supply market is itself a major cause of even lower supply, creating a powerful and damaging feedback loop.
So how do you navigate this tricky market:
For buyers, this means a challenging and fast-moving environment where being prepared, pre-approved, and decisive is crucial.
For sellers, it represents an opportunity to achieve a strong sale price quickly, provided their own next purchase is carefully planned in the same competitive market.
Find an agent who understands the market, your needs and lean on them to help achieve your goals.
REIWA President Suzanne Brown said the median house sale price was trending towards 10 per cent growth over the year, while unit prices were on track to achieve 15 per cent growth.
