Perth’s inflation rate is now sitting at 4.9% — the highest in the country.
On a headline level, that sounds concerning.
But if you understand how inflation works and how the Reserve Bank sets interest rates. The implications for the Perth property market are very different from what the headlines suggest. Let’s break it down properly.
This Is Not a Credit Boom
Perth’s inflation is being driven by:
It is not being driven by excessive borrowing, speculative property activity, or a debt-fuelled spending surge.
That distinction matters enormously. If inflation of this scale were occurring across the entire country, fuelled by credit growth and discretionary spending, the RBA would have no choice but to raise rates aggressively.
But it isn’t. Monetary policy is set nationally. And nationally, inflation is moderating.
The cash rate remains at 4.35%, and markets are even pricing the possibility of rate cuts into 2025. Perth’s localised inflation does not automatically trigger national rate hikes.
Why Perth Is Actually Well Positioned
Western Australia grew 2.2% last financial year, one of the strongest population growth rates in the country.
More people means:
At the same time, supply remains constrained. Construction costs are still elevated. Labour shortages persist. New housing approvals are not keeping pace with migration.
That combination supports property values. This is structural demand, not speculative heat.
The Rental Market Tells the Story
Rents have risen around 6%.
Vacancies remain tight. Investors are seeing improved yields compared to the eastern states.
When inflation is concentrated in essentials and housing, rather than discretionary consumption, property tends to remain supported, particularly in affordable capital cities like Perth.
If This Were National, Rates Would Rise
Here’s the key point.
If 4.9% inflation were broad-based across Australia, driven by consumer demand and credit expansion, the RBA would likely tighten policy sharply.
But Perth’s inflation is:
It is not systemic overheating. That’s why we are not seeing panic in rate markets.
What This Means for the City of Belmont and Perth Metro
In markets like Belmont and surrounding inner-metro suburbs, we continue to see:
Perth remains one of the most affordable capital cities in Australia relative to income. Replacement costs remain high. Land supply is limited. Demand is consistent. Those are supportive fundamentals.
The Bottom Line
Perth has the highest inflation in the nation at 4.9%.
But this is not the type of inflation that historically forces dramatic interest rate hikes. It is localised, essentials-based and tied to population growth.
For the Perth property market, that is a fundamentally different scenario.
Strong demand + constrained supply + stable national monetary settings = Supportive conditions for property.
Andrew Huggins
Principal – Ray White Urban Springs
Highest selling agent in the City of Belmont for over 20 years
If you’d like an updated appraisal or a strategic discussion about buying or selling in the current Perth market, reach out directly
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