We’ve all heard the news about how tight Perth’s rental market is right now.
But new research reveals that despite rising rents, Perth remains one of Australia’s most affordable capital cities for rental homes. Let’s take a look at the data.
Perth rental market update
It’s no secret that the Perth rental market is running hot.
The August vacancy rate – 0.7% – was the lowest since November 2012 according to SQM Research. To give that figure some context, a vacancy rate of around three per cent is considered the mark of a balanced rental market.
The number of rental listings is also remarkably low – 2685 for the week commencing 17 September. That’s the lowest number of advertised rental listings we’ve seen since November 2012.
This high demand, low supply situation is driving up rent prices. The September median rent for Perth houses was $520 and for units $400 according to SQM Research. House rents have been hovering around this level since April, representing the highest prices since March 2015. Meanwhile, unit median rents have been sitting around the $400 mark since May, the highest they have been since July 2015. Despite this, rents are still falling well short of the highs of 2013, when a house rented for $620 and a unit $475.
Gross rental yields are also riding high. The yield for houses has been hovering at 3.9% or above since December 2020, peaking at 4.1% in May and sitting at 3.9% as of September. These figures are the highest they’ve been since January 2014. The September yield for units was 5.4%. The last time it was this high was July 2013.
However, these figures don’t show the whole picture.
WA rents Australia’s most affordable
Despite the fact that Perth rents are the highest they’ve been in around six years, they remain some of the most affordable in the country.
New data released by the Real Estate Institute of Australia (REIA) shows that rental affordability has improved slightly across the nation by 0.3 percentage points in the second quarter of 2021. It also reveals that WA is the most affordable state or territory in which to rent, with our median income to rent ratio sitting at 19 per cent. By contrast, the national average proportion of income required to rent is 22.8 per cent.
Over the long term, REIA’s Housing Affordability Report: the last 20 years research shows that rental affordability in WA has declined by only 1.9 percentage points in the twenty years to June 2021.
Are you looking for expert advice about the Perth rental market? We’re here to help. Contact our specialist property management team today.