As of September 2024, Perth’s rental vacancy rate stands at 1.6%. This figure, while a slight improvement, remains well below the ideal balance range of 2.5 – 3.5% identified by the Real Estate Institute of Western Australia. This year’s rental market in Perth has been a challenging landscape for renters and property owners alike, with ongoing demand and limited housing supply creating fierce competition and driving up rental prices. However, recent trends indicate a subtle yet promising shift in the market.
For the past few years, renters across Perth have faced an uphill battle due to low vacancy rates, intense competition, and rapidly increasing rents. Landlords, on the other hand, have enjoyed strong rental yields due to the lack of supply relative to demand. But, as the rental market begins to show early signs of stabilisation, we’re seeing properties take a bit longer to lease, and median rent prices have held steady. This change is encouraging, as it suggests a more moderate market trajectory.
Signs of a Moderating Market
Several indicators now show a cooling in the rental market. The increase in vacancy rate to 1.6% is evidence of more properties gradually becoming available, and although this shift is slight, it does suggest a move toward a more balanced market. We anticipate further easing of vacancy rates in the coming months as more supply becomes available, and rental prices remain stable. However, this movement will likely be incremental, as the 1.6% vacancy rate is still far from REIWA’s balanced threshold.
What This Means for Landlords
While this adjustment provides some relief for tenants, landlords should be mindful of the evolving market when advertising rental properties. A lower vacancy rate still indicates a tight market, but less competition and fewer applicants at home opens may impact leasing timelines. Furthermore, the level of interest can vary significantly based on the property’s location and price range—certain suburbs and price brackets may still attract high demand, while others may experience less foot traffic.
As Perth’s rental market moves towards equilibrium, understanding these subtle changes will be essential for landlords seeking to stay competitive. Setting realistic rental prices in line with current market conditions can help attract reliable tenants.
In Summary
Though Perth’s vacancy rate remains low at 1.6%, we’re seeing early signs of a rebalancing market. As the vacancy rate gradually rises, landlords should adjust their expectations accordingly, recognising that tenants may have slightly more choice than they did even a few months ago. While the market remains in favour of property owners, some areas and property types will require a more strategic approach to maintain occupancy and consistent rental income.
By Jessica Brewer, Head of Property Management Department