Missed Perth’s boom? Karratha’s the next hotspot for value and returns

Sales volumes reflected the strong demand, with house sales rising 47.2 per cent to 141 transactions, while unit sales jumped 45.0 per cent to 29 sales.

PRD chief economist Dr Diaswati Mardiasmo said the price surge has helped insulate the market from the broader effects of high interest rates.

“Karratha median house price saw double-digit growth in the past 12 months, mostly due to an increase in demand during this time,” she said.

“The number of houses sold surged by 47.2 per cent within this time frame, which is substantial.”

Compared to Perth, where the median house price is approximately $850,000, the market update showed that Karratha offers significantly better affordability, with prices being nearly 20 per cent lower.

Mardiasmo said that as Perth’s market continued to rise 11.3 per cent in the last year, Karratha has benefited from a spillover effect, attracting buyers priced out of the capital.

She said Karratha’s rising appeal was due to its ongoing infrastructure, industrial and mixed-use developments that have stimulated the local economy.

“You are seeing more life, more jobs, the economy stimulated in Karratha,” she said. “All in all, this created a buffer against higher interest rates.”

While the unit market softened slightly in the 12 months to December 2024, Mardiasmo said it was largely attributed to limited stock and small sample size.

“The main issue with the unit market in Karratha is that it is small, there were only 29 unit sales in the last December quarter of 2024,” she said.

“Many people are still preferring to live in houses in the area, and it does cost a lot to build a unit in Karratha – so we don’t have a lot of stock coming either.”

Despite the lower supply, Mardiasmo said that affordability in Karratha’s unit market remains a drawcard for investors and first home buyers.

“Further, demand for units in Karratha increased by 45.0 per cent in the past 12 months, December quarter 2024, which means that many people are seeing units as an alternative to more expensive houses,” she said.

PRD’s property update indicated that as of December 2024, the median weekly house rent rose to $1,200, up 9.1 per cent annually, while the vacancy rate sat at just 1.0 per cent, below the national benchmark of 3.0 per cent.

Data showed that Karratha’s declining vacancy trend signals strong ongoing demand and rapid tenant turnover.

Mardiasmo said that with the median unit price sitting around $390,000, comfortably under the $450,000 price cap for government schemes, it becomes a more viable option than Perth.

“In comparison, the median unit price in Perth, currently at $599K, is just under the price cap – which means that there is not much stock that first home buyers can go for.

“So for first home buyers, especially those who do want to make use of the scheme/grant, it makes more sense for them to look at a place like Karratha than Perth”.

In addition to first-time home buyers, Mardiasmo stated that the Karratha market has been very attractive to investors following lower prices and high rental yields.

In December 2024, house rental yields soared to 10.4 per cent, well above the local government area’s 7.3 per cent and Perth metro’s 3.9 per cent.

“For example, if you are a Sydney investor, the median house price in Karratha is half of the median house price in Sydney, with almost five times the house rental yield,” Mardiasmo said.

“It has strong fundamentals for high returns, especially with a double-digit house rental yield (10.4 per cent) and higher affordability when compared to Perth.

“It really does create a key opportunity for first home buyers and investors,” she said.

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