Perth’s median rent reached an all-time high of $535 per week in February, with vacancy rates remaining well below what’s considered a balanced market range.
Rents in the city are now $15 higher than January (up 2.9 per cent) and $85 or 18.9 per cent higher than February 2022, according to figures from the Real Estate Institute of Western Australia.
The vacancy rate in Perth currently sits at 0.7 per cent, below the balanced market range of 2.5 per cent to 3.5 per cent.
REIWA Chief Executive Officer, Cath Hart, said there needed to be between 18,000 to 20,000 properties added to the rental pool in order to return to a balanced market.
Nearly 19,000 rental properties had been removed from the rental pool in the past two years due to investors exiting the market, she said.
“This reduction in rental properties combined with a continually growing population is driving WA’s rental shortage,” Ms Hart said.
She said demand for rental accommodation from those awaiting completion of a new home was also contributing to the tight rental market.
“Delays in the building industry have also played a role as many tenants who took advantage of Covid building incentives are still waiting for their home to be completed and need to retain their rental accommodation in the meantime,” she said.
Ms Hart predicted Perth would continue to see a tight rental market in the months ahead.
“… while we expect there to be some easing of the market as building completions improve, demand will remain strong as our population continues to grow,” she said.
All levels of government would need to work on implementing policies that encouraged investors into the market for the rent squeeze to abate, she explained.
“At local, state and federal levels of government, we need policy settings that encourage rather than discourage people from investing in rental properties,” Ms Hart said.
“This could be local planning policies, fair and equitable regulations on rentals, or tax settings for negative gearing or capital gains.
“We also need policies that support development in general so more houses can be built.”
The Perth suburbs home to the highest rent increases included East Fremantle (up 64 per cent to $900 per week), Cottesloe (up 29 per cent to $875), Claremont (up 26 per cent to $698), Fremantle (up 22 per cent to $670) and Victoria Park (up 21 per cent to $520).
“Demand continues to exceed supply across Perth and, under current conditions, we expect to see more price increases in coming months,” Ms Hart said.
Listings on reiwa.com reduced over the month, reflecting tighter supply.
There were 1703 properties for rent by February 28, a decline of 9.1 per cent from January and 21.5 per cent lower than a year prior.
It took a median of 14 days to lease a rental during February, one day faster than January and two days faster than February 2022.
The suburbs where rental stock moved fastest were Kelmscott (four days); Bassendean (eight days); Coolbellup, Osborne Park, Palmyra, Seville Grove and Wandi (nine days); Greenfields and Shenton Park (10 days); and Atwell (11 days).
