Perth’s Rental Vacancy Rate Hits 2% : What It Means for Investors and Tenants

Perth’s rental vacancy rate has risen to 2% - its highest level since June 2020 and further evidence of a gradual shift in the local rental market.

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The fresh data released by REIWA this week showed the rental vacancy rate in Perth rising 0.1% in January, after recording a rental vacancy rate in December of 1.9%.

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REIWA noted that on current trends, the Perth rental market could return to a balanced market by mid 2025 - REIWA considers a vacancy rate of between 2.5% and 3.5% to be a balanced market where supply and demand are in equilibrium.

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Perth has been in the midst of a rental crisis in recent years, which has seen the vacancy rate drop to record lows of less than 1% and led to huge increases in rental prices.

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What’s Causing the Rise in Vacancy Rates?

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REIWA attributed the rise in the vacancy rate to a number of factors including:

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• Changing tenant behaviours: More tenants are opting to share accommodation, purchase homes, or stay with family to avoid rental pressures.
• Increased supply from new builds: Completed investor new builds have added stock to the market.
• Tenants moving into new homes: Some tenants have finally moved into their completed homes, freeing up well-needed rental properties.

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Which Suburbs Are Most Impacted? 

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Rent Choice general manager Clare Christiansen said the property management agency had seen these trends first hand, however competition for rentals varied across suburbs.

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“We are seeing more new builds hit the rental market - especially where many investors have purchased house and land packages in estates that are all coming to completion at the same time,” Clare said.

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“It’s typically in these suburbs where we are seeing a softening in rental prices, whereas there is typically more competition for rentals in established suburbs close to the CBD, good-school catchments, river or ocean - it’s in these areas where prices are remaining buoyant."

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What this means for investors and tenants

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For investors, the rising vacancy rate means it's crucial to  price their properties competitively, reflecting the demand and supply for the local areas.

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For tenants, the slight increase in availability could offer more choices and possibly ease rental competition in some areas.

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As Perth’s rental market continues to adjust, staying informed on these trends is essential for both landlords and tenants. Rent Choice remains committed to providing expert property management services to navigate these market shifts effectively.

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