Will mining drive Perth’s property boom in 2025?

Perth’s property market has long held hands with Western Australia’s mining sector. It historically has run along a similar trajectory, with mining booms and busts known for causing respective upward and downward tilts in the property sector.

As mainstream media might tell you, along with anyone with a foot in the door in oil and gas, the relationship between the resources sector and the real estate market is set in stone; the former has a direct impact on the other. We will agree the relationship is an important one to understand for homeowners and property investors. But WA is more complex than merely being a mining state. There are other factors that influence the state’s property market.

For now though, let’s find out how mining pulls the levers in WA’s real estate machine and how it might influence WA property in 2025.

Mining’s influence on Perth’s property landscape

Historically, the fortunes of Perth’s real estate have mirrored the ebbs and flows of the mining industry. A surge in mining activities can lead to increased employment, population growth and increased demand for housing. On the other foot, downturns can temper property market enthusiasm.

In 2024, the mining sector faced notable challenges. Commodity prices, particularly for iron ore, saw volatility due to shifting global demands and geopolitical tensions. The industry was cautious to make large investments due to the uncertainty ahead. BHP reported a 23 per cent drop in profits in the first half of 2024 due to lower iron ore prices, steelmaking coal prices and inflationary pressures.

But where there are hurdles there’s resilience, with Perth’s property market demonstrating as much last year. By December 2024, the median house price had climbed to $740,000, reflecting serious demand amid short supply.

We’ve talked about this ad nauseam: factors such as record migration (i.e. 60,000 incoming migrants in the 2024 financial year), a struggling construction sector and a chronic housing shortage have all contributed to the highest median house sale price in Perth since 2007, peaking at 24.8 per cent in October.

Challenges for the WA mining sector in 2025

While the mining sector is set for growth, especially with potential declines in interest rates and increased geopolitical stability, challenges persist. Labour shortages and supply chain disruptions remain pressing issues. There’s also the threat of fewer people arriving in WA to fill those jobs due to the lack of housing for workers and their families. Word is now out: WA is a difficult place to set up camp.

And of course, there’s Trump. While it’s not expected that he’ll wage his tariff war on Australia, there could be an indirect impact on our shores from the tariffs he’s expected to place on other countries’ goods. US tariffs on Chinese goods, for example, could be detrimental to Australian mining if those goods rely on Australian minerals.

Mining’s role as a driving force

Mining will undoubtedly remain a significant driver for Perth’s property market in 2025. The sector’s expansion plans, especially in commodities like copper and rare earths, are set to bolster economic activity. Notably, Japanese investments totalling $10 billion over the past six months have rejuvenated mining projects and shown the positive trajectory the sector will likely take.

You’ve likely heard that the property market’s heavy reliance on mining renders it susceptible to global commodity price fluctuations. Economic volatility, influenced by global demand and geopolitical events, can impact both the mining sector and, by extension, the property market. But there’s a limit to mining’s persuasive powers.

Impacted but not reliant

Perth’s property market is expected to continue its upward trajectory in 2025, albeit at a much more moderate pace than preceding years.

Median house prices could reach between $840,000 and $856,000 by the end of 2025, marking a very decent 5.2 per cent increase in dwelling values for the calendar year. This growth is underpinned by factors such as population influx, limited housing stock and sustained rental demand. All this is possible without huge tailwinds from the mining industry. While the market may be impacted by positive and negative news from the commodities sector, it doesn’t quite have the strength to make or break the market.

That said, investors should be aware of the relationship, watch for key signals which might disrupt the real estate market and lean into warning signs that show the market has hit—or is on its way to—its peak.

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Properties & Pathways is a leading commercial and residential property syndicator in Australia. Our priority is our investors, ensuring the highest quality investments and the most transparent communication. 

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