Perth Rental Market Update – January 2025

As we step into 2025, Perth’s rental market remains a key focus for property investors, tenants, and industry professionals alike. The rental vacancy rate, a critical measure of market health, has shifted significantly over the past year. As of January 2025, the vacancy rate stands at 1.9%, marking a notable increase from the record low of 0.4% recorded in March 2024. This development signals important changes in the market dynamics.

A Brief Look Back

Since 2021, Perth’s rental market has been in a state of crisis, with vacancy rates consistently below 1% since 2020. These tight conditions have created challenges for renters, with fierce competition for available properties and rapidly escalating rental prices.

In 2024, we began to see a shift. The vacancy rate rose due to changes in supply and demand, as an increase in listings provided renters with more choices. This adjustment reflects a gradual easing in the rental market, a trend that had been long-awaited by tenants and industry observers alike.

Current Market Dynamics

The current vacancy rate of 1.9% represents a market that, while still tight, is less constrained than in previous years. Several factors contribute to this easing:

  • Growth in Supply: The increase in property listings has helped alleviate some pressure in the market, offering renters a greater range of options.
  • Demand Shifts: With more supply available, properties are taking longer to rent, leading to a stabilisation in growth rates.

While these changes are positive, the market is still far from balanced. For context, a vacancy rate of 3% is typically considered indicative of a balanced rental market.

2025 Forecast

Looking ahead, the rental vacancy rate is expected to remain elevated compared to the lows of 2020–2024. However, it is unlikely to reach a truly balanced state in the near term. Despite the easing, tenants will continue to face challenges as demand remains robust.

House prices, meanwhile, are projected to grow by 8–10% by the end of 2025. This growth underscores Perth’s strong property market fundamentals, making it an attractive prospect for investors while also maintaining pressure on affordability for buyers and renters alike.

What This Means for Renters and Property Owners

For renters, the increase in vacancy rates offers some relief, with more choice and less immediate competition for properties. However, affordability challenges persist, and securing a rental may still require flexibility and proactive efforts.

For property owners and investors, the easing rental market highlights the importance of competitive pricing and well-maintained properties to attract and retain tenants. Additionally, the anticipated house price growth provides an opportunity for capital gains, reinforcing the long-term value of investing in Perth’s property market.

While the pressures of recent years have begun to ease, the Perth rental market is still on the path to recovery. Both renters and property owners will need to navigate these shifting dynamics thoughtfully. At Abel Property, we remain committed to providing expert guidance and support to our clients as we adapt to these changes together.

If you have questions about the current rental market or need assistance with property management, feel free to reach out to our team. We’re here to help you make informed decisions in this evolving landscape.

By Jessica Brewer – Head of Property Management, Abel Property