Western Australia’s economy in 2025 continues to demonstrate impressive resilience, supported by a thriving resources sector, a healthy employment market, and consistently high property demand. According to the Western Australian Treasury Corporation’s latest update, the state’s economy is expected to grow by 4.25% for the 2024-2025 financial year, making one of the highest growth rates seen in nearly a decade. This growth is primarily driven by continued investments in mining, infrastructure, and a robust export market, particularly in iron ore and LNG, which are key drivers of the state’s economic success.
Consumer sentiment stays positive, though inflationary pressures and fluctuating commodity prices present ongoing risks that businesses need to navigate. As a result, companies are closely monitoring global economic trends, as well as potential shifts in government policies that could affect influence future investment opportunities and market stability.
Employment and Workforce Trends
Western Australia’s job market remains strong, with employment rising 4.2% over the past year. The unemployment rate currently stands at 3.6%, reflecting a stable and thriving workforce. Demand for skilled workers remains exceptionally high, particularly in construction, mining, healthcare, and professional services, which continue to be core sectors fueling the state’s growth.
However, skills shortages continue to present challenges, especially in regional areas where businesses struggle to fill essential roles. In response, the government has increased efforts to attract interstate and international talent, offering targeted incentives to strengthen the workforce in critical sectors. These initiatives aim to alleviate pressure on employers and ensure that key industries can continue to thrive in the long term.
Property Market Trends
Perth’s property market remains highly competitive, driven by strong demand and a shortage of available housing. While weekly sales transactions dropped 19% (869 transactions) for the week ending 09 March 2025, the overall market remains robust, with property values continuing to climb.
The total number of properties for sale in Perth increased by 2.9% from the previous week, bringing total listings to 4,969. Limited housing supply, high rental demand and rising migration are all contributing to strong rental yields and low vacancy rates, creating a highly favorable environment for property investors.
Regional markets have also seen a notable growth, particularly in Geraldton and Albany, where home values have increased by 6.3% and 5.9% respectively over the past quarter. Investors are increasingly targeting these regions, especially as housing affordability becomes an emerging concern in Perth’s market.
Inflation and Interest Rates
Inflation in Western Australia has started to ease slightly, which prompted the Reserve Bank of Australia (RBA) to reduce the cash rate by 25 basis points to 4.10% in February 2025. This adjustment aims to stimulate economic activity and ease cost-of-living pressures. However, analysts are divided on whether further rate cuts will occur in 2025. Some suggest that inflationary pressures in energy and housing may lead the RBA to adopt a more cautious approach, keeping future interest rate decisions uncertain.
Energy Sector Developments
Western Australia’s LNG sector is facing a period of uncertainty due to delays in regulatory approvals for the North West Shelf (NWS) project extension. Industry leaders, including Japan’s JERA, one of WA’s largest LNG buyers, have expressed concerns that further delays could lead to job losses and a shift in energy investment away from Australia.
At the recent Energy Exchange Australia conference in Perth, stakeholders urged the government to streamline the approval process to ensure Australia’s continued position as leading LNG supplier. The energy sector remains a critical component of WA’s economy, and ongoing uncertainties could impact both investor confidence and job security within the industry.
Outlook for 2025
Looking ahead, Western Australia’s economy remains on a solid trajectory, with key growth drivers in mining, real estate, and infrastructure investment continuing to fuel expansion. However, global economic conditions, fluctuations in interest rates, and regulatory challenges within the energy sector will play crucial roles in shaping the state’s financial landscape for the remainder of 2025.
Businesses and investors should stay vigilant, closely monitoring market trends, especially in property and commodities, as these sectors will likely define WA’s economic performance in the months ahead. As always, adaptability and forward-thinking strategies will be essential for capitalising on emerging opportunities and navigating any potential risks.
