Perth Sales Rental Update January 2024
Renting a property in Perth has become harder and almost impossible in Perth with a vacancy rate hovering around 0.5% between December 2022 to December 2023. This means that for every 1000 properties, there were only 5 vacant. Per REIWA, a balanced market is usually between 2.5% and 3.5%, and the recent low vacancy rate has caused rents to surge.
In terms of median rent/week between December 2022 and December 2023, houses have increased from $520/week to $600/week, whereas units have increased from $450/week to $550/week, increases of 15% and 22% respectively.
Several factors have caused such effects which include both interstate and overseas migration to Perth; consecutive interest rates rises; and a critically low supply of new homes entering the market, both for homebuyers and renters, given insolvencies plaguing the construction industry, the rising costs and shortages of both labour and materials.
These higher rental returns and yields for investment properties have attracted many investors and buyers from all over Australia and given the low vacancy rates of rental properties, we find ourselves caught between the needing the investors to help ease the rental market and Perth’s low vacancy rate, whilst also being frustrated with the investors who have been pushing property prices up for homebuyers.
The rental market unfortunately shows no signs of slowing down in the coming year. One relief may stand to help ease the crisis in 2025, with the Federal Government halving immigration, but given Perth’s other factors such as lower cost of living, current interstate migration to WA, WA’s surging population growth and opportunities for first home buyers, we will have to keep an eye out to see how the rental market moves in the coming year.