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.

The relationship between the resources sector and the real estate market is strong; the former typically has a direct impact on the latter. And this is crucial for homeowners and property investors to understand, especially when deciding on when to buy and (perhaps more importantly) when to divest. There are of course many other influences on WA’s property market, but few are more important than mining.

Let’s find out how mining pulls the levers in WA’s real estate machine and how the sector will 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.

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.

So, what about the future? What does 2025 have in store for both mining and WA’s property market?

Challenges for the WA mining sector in 2025

The mining sector has seen commodity prices fall in recent months. Some might even say plummet.

Soft global economic growth is the likely culprit, impacting demand for major resources and energy exports. Forecasts say commodity exports will fall by 10 per cent in the current financial year.

With potential declines in interest rates and increased geopolitical stability, challenges will persist in the mining sector. 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

The property market’s heavy reliance on mining makes 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.

Mining will undoubtedly remain a driver for Perth’s property market in 2025. But for good or for bad, we’re yet to find out. Mining companies are announcing reduced profits. 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. And the expectation—unless global uncertainties are resolved—is that this may continue.

Of course, 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. 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 2024.

But will this last?

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.

That said, there is no greater single contributor to WA’s economic health than the mining and resources sector. Perth is undeniably a mining state. And it’s with that that investors should keep watch WA’s mining activity for telltale signs of the Perth property market’s future. Be aware of the relationship between mining and real estate, 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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