February Market Wrap: What Investors Need to Know

The big news this month was the Reserve Bank of Australia’s (RBA) decision to cut the cash rate by 25 basis points to 4.1% at its February meeting. This marks the first rate reduction since early in the pandemic and is expected to be the first of several cuts this year.

With lower borrowing costs on the horizon, many investors are watching closely to see how the market responds.

Market Performance in February

While capital cities saw modest gains, Perth’s home value growth continued to slow, recording just a 0.3% increase for the month—mirroring the combined capital cities' average. This moderation in growth is becoming more evident, with Perth showing a 0.3% increase for the rolling quarter and a 14.9% annual rise according to CoreLogic data.

Nationally, dwelling values increased 0.3%, with most capital cities recording marginal gains between 0.2% and 0.4%, except for Darwin, which saw a -0.1% decline. Melbourne recorded its first monthly increase after ten consecutive months of falling values, suggesting a potential shift in market sentiment.

Stock Levels and Sales Activity

Property supply remains a key theme in Perth. According to REIWA, 4,829 properties were for sale across Perth at the end of February—down 12.1% from January but still 22% higher than the same period last year. Notably, current stock levels remain 14% below last November’s levels, indicating supply constraints are still in play.

On the demand side, sales activity surged, with a 36.5% increase in transactions from January to February, reinforcing strong buyer appetite despite a slowing price growth rate.

Spotlight on Cottesloe

Cottesloe, one of Perth’s prestigious coastal suburbs, has become a focal point for property investors in 2025. Known for its white sandy beaches and vibrant community, Cottesloe offers both natural beauty and financial opportunity. The suburb's property market is robust, with the median house price reaching $3.54 million, up 5.8% year-on-year. The unit market has seen even more impressive growth, with prices up 50.9%, bringing the median to $1.2 million.

Despite a 13% decline in rental growth, the median rental price remains strong at $1,000 per week, attracting professionals and families seeking high-end homes. Cottesloe's exclusivity and proximity to both the CBD and the beach make it a haven for high-end individuals and families.

Investor Takeaways and Market Outlook

While the year is still young, early signs of stabilisation continue to emerge. Perth’s vacancy rate increased to 2% in January, price growth is slowing, and stock levels are showing signs of recovery. However, key market drivers to watch in 2025 include:

• Supply vs. Demand Mechanics – Will housing supply catch up with demand, or will ongoing constraints keep prices elevated?

• State Economy & Iron Ore Prices – WA’s economy remains heavily influenced by iron ore. Any shifts in pricing could impact housing demand.

• Population Growth – While growth remains positive, migration trends are starting to slow.

What This Means for Investors

Despite slowing price growth, Perth remains an attractive market for investors due to ongoing supply shortages and strong rental demand. While further rate cuts are expected, the real factors to watch will be how supply and demand balance out over the coming months and whether economic conditions remain supportive of property growth.

If you’re looking to secure an investment property in this evolving market, sourcing the right property at the right price is key. Whether you're considering Perth or exploring other high-growth markets, having the right strategy can make all the difference.

If you're ready to discuss how to capitalise on current opportunities, let’s connect and talk strategy.