In January 2025, Perth witnessed a slight uptick in its rental vacancy rate, reaching 2%, a figure not seen since June 2020.
This increase, though modest, is from December 2024's 1.9% and suggests a gradual move toward a more renter-friendly market.
Cath Hart (pictured above), CEO of the Real Estate Institute of Western Australia (REIWA), provided insights into the factors influencing this shift.
“The vacancy rate is a reflection of demand and supply, and these factors have been changing over the past six months,” Hart said.
The decline in demand can be attributed to an increase in the size of tenant households and a growing preference for buying over renting. Additionally, more people are choosing to stay or move back into family homes, sidestepping the challenges of the rental market.
Supply has also seen adjustments.
“We’ve also seen completed investor new builds come to the market and boost supply,” Hart said. “Furthermore, some tenants having their new homes completed have moved out of their rentals, freeing up existing supply.”
These developments contribute to the rising vacancy rate.
Amid these changes, Perth’s property market has experienced a robust price surge, with the median property price soaring by 23.3% to $740,000 as of December.
The rental market in Perth also grew, with median dwelling rents reaching $670 per week, up 8.9% from last year. Despite some fluctuations, the growth rate has moderated from last year’s sharp increases, according to REIWA.
While the overall vacancy rate is on the rise, regional differences persist.
“Some suburbs, particularly those closer to the city, continue to see strong demand, keeping their vacancy rates low,” Hart said.
In contrast, areas with a surge in new builds are experiencing longer vacancy periods.
Looking forward, Hart remains optimistic about achieving a balanced market, with REIWA identifying a vacancy rate between 2.5% and 3.5% as indicative of such a state.
“If current trends continue, Perth’s vacancy rate could reach equilibrium by mid-2025,” she said.
