Retail sector tops Perth’s commercial market for quarterly price growth

The institute’s findings revealed that the annual median sale price per square metre for the Perth retail market was $5,238, a 23.8 per cent increase over the March quarter and 6.3 per cent higher than the 12 months to December 2024.

REIWA president, Suzanne Brown, said Perth’s retail growth had been bolstered by renewed investor interest and improved confidence in the city’s market.

“Our members are seeing a broad range of investors, with many turning to retail due to rising prices and reduced yields in the industrial market,” Brown said.

“There has also been increased enquiry from eastern states groups, who are comparing our yields and pricing to Sydney and Melbourne and seeing value,” she added.

While Brown acknowledged that investor sentiment had lifted in Perth, she noted that a broader climate of uncertainty has persisted, prompting investors to focus on properties with strong tenancies.

Western Australian population growth boosting retail demand

In addition to investors looking for stronger yield, Brown said that Western Australia’s population growth has strengthened Perth’s retail market demand and fuelled activity for commercial property in the city.

Data from the Australian Bureau of Statistics showed that Western Australia was the fastest-growing state for demographic growth, with the state’s population increasing by 2.8 per cent during 2023–24.

“Population growth creates more customers for existing businesses, and it also brings in people wanting to establish their businesses,” she said.

“This leads to demand for retail properties and, combined with investor interest, is creating momentum in suburban and lifestyle precincts.”

Over the 12 months to March 2025, Perth’s inner subregion posted the highest annual median sale price per square metre of $7,500, with the south-west subregion following at $6,650 per square metre.

REIWA’s data also showed that across the entirety of Perth, well over a quarter (28.7 per cent) of all retail sales were priced between $250,000 and $500,000 during the first three months of 2025.

On an annual scale, REIWA reported that the Greater Perth region has hosted 212 retail sales from 12 months to March 2025, which registered 34.2 per cent higher than the previous year.

Over the same period, the inner subregion was home to the most retail sales (57), which was followed by the south-west subregion (39 sales), and the north-west and south-east subregions, which both had the third most sales (38).

Industrial market thriving amid tightening supply

Perth’s industrial market saw strong performance in the March quarter, with the city’s annual median sale price per square metre rising to $2,675, a 14.5 per cent increase year-on-year and 2.7 per cent higher than at the end of 2024.

Across Perth, 37.6 per cent of the city’s industrial sales were priced between $1 million and $5 million, with the city’s inner subregion posting the highest annual median sale price per square metre of $3,333.

While a total of 1,043 industrial sales in the Greater Perth region were recorded over the 12 months to March 2025, REIWA’s data showed that volumes were down 7.6 per cent compared to the previous year.

Suzanne Brown said that the decline in sales volumes reflected limited supply instead of signifying a drop in demand.

“REIWA members report they continue to field strong enquiries, particularly from businesses wanting to secure their own premises, but many are struggling to find the right property,” Brown said.

“There is strong competition for quality properties, with some buyers willing to pay above the asking price to secure them,” she added.

Interest rising for Perth office spaces

During the 12 months to March 2025, Perth’s office market recorded a 10.2 per cent increase to $4,500 per square metre, registering only 2.9 per cent higher than in 2024.

In Perth’s office market, the inner subregion registered the highest annual median sale price per square metre of $4,821, and recorded the most sales (195) over the 12 months to March 2025.

The number of office market sales in Perth notched up to 452 sales in the Greater Perth region in the March quarter, sitting 12.4 per cent higher than the previous year.

Brown said that the city’s office market recorded a “modest rebound in sales” over the year, with most Perth office spaces selling to local owner-occupiers.

“There has been a lot of interest in office spaces priced between $250,000 and $500,000, which made up 36.2 per cent of sales over the past year,” she said.

“Buyers are typically looking for premises between 40 and 80 square metres for their own use, with some members reporting particular interest from financial advisors, consultants and medical specialists.”

Although Brown said that well-kept Perth office spaces in convenient locations are recording good prices, she cautioned that distressed properties are faring worse by comparison.

“Well-presented spaces with good natural light, parking and requiring minimal expenditure are achieving good prices. Those needing significant work are proving harder to sell.”

Brown encouraged those investing in the Perth office market to consider tenant demand.

“There are still large amounts of office spaces for lease in suburbs like West Perth and East Perth. And tenants prefer properties that are fitted out, as fitting a property out at $1,500–$2,000 per square metre adds considerable expense to their move,” Brown said.

While investor sentiment in Perth’s office market remains cautious, Brown stated that signs of renewed interest are surfacing.

“Our members have seen some eastern states investors start to re-engage with Perth’s office market, drawn by the comparative affordability to the eastern states,” she said.