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What’s Likely To Happen To Perth’s Rental Market In 2024?

2023 has been a strong year for Perth’s property market, with both the sales and rental markets performing better than any other major city in Australia.

We analyse what happened over the past 12 months and look ahead to 2024 to forecast what’s in store for landlords and tenants.

Record low vacancy rates persist

Perth’s vacancy has been sitting at a record low of just 0.7%, according to REIWA – the same rate that it was experiencing a year ago. This means that, for every 1,000 rental properties across the city, you can expect only seven to be on the market at any one time.

To put this in perspective, in a balanced rental market, the vacancy rate would typically be between 2.5% and 3.5%.

This exceptionally low vacancy rate is the result of a head-on collision between growing demand and ultra-low supply.

Over 2022 and 2023, Perth became Australia’s fastest-growing major city, with WA experiencing a growth rate of 2.8% in the year to March 2023, according to ABS data. All up, our state had a net gain of 78,300 new residents in those 12 months, pushing the WA population closer to three million.

The population of the Perth metropolitan area is now estimated to stand at over 2,225,000. That’s an incredible statistic when you consider our city only reached one million residents in 1985. At the time, Perth was roughly the same size as Adelaide. Today, our city has almost a million more people (Adelaide’s population is around 1.35 million).

What’s more, Perth’s growth trajectory is expected to continue, with a population of 2.9 million forecast by 2031.

Every one of the new arrivals needs somewhere to live, and most choose to rent – at least at first. And yet, at the same time as our population is swelling, the number of listings has been low since late 2020.

Rising rents

Our low vacancy rate is causing rents to continue to rise sharply.

REIWA data shows that the median weekly rent for Perth houses has lifted $80 or 15.4% over the past year from $520 to $600.

Meanwhile, the median apartment rent has risen even more rapidly, going from $450 to $550 – a gain of 22.2%.

These increases represent the third year in a row of double-digit gains. The median house rent is now 50% higher than it was in 2020, while the median apartment rent has grown 52.8% over the same time.

This is obviously welcome news for landlords looking for income. Yields on Perth rental properties are the highest of any major Australian city, with the median house now delivering a gross yield of 4.4% and apartments returning 6.2%.

However, it is not great news for tenants. Our city’s median rent is substantially higher than Melbourne’s and more or less equal Brisbane’s, despite the median dwelling price in our city being much lower.

In October, realestate.com.au declared Perth to be Australia’s toughest city for renters, with rental homes in the Bentley area experiencing an average of 160 enquiries, and a further eight areas experiencing over 130.

New legislation to impact investors and tenants

In May 2023, the government announced widespread reforms to the Residential Tenancies Act, which regulates the tenant/landlord relationship. In November, it then introduced these into parliament (although they’re unlikely to become law until mid-2024).

These new reforms include:

  • Limiting rent increases to once every 12 months
  • Allowing tenants to keep pets in most circumstances
  • Streamlining the process around releasing bonds, including creating a new dispute resolution process
  • Preventing landlords and real estate agents from engaging in ‘rent bidding’
  • Protecting a tenants’ ability to exercise their rights.

We wrote about these reforms earlier in the year, and you can read our analysis of them here.

A big year for Rentwest

Finally, 2023 was a big year for our business too, as we took out three awards in the REIWA Awards for Excellence.

Rentwest won Large Residential Agency of the Year, alongside the Sustainable Leadership Award for an Agency, while Marion Gruchet won Residential Property Manager of the Year.

We’re proud of these awards, as they demonstrate our commitment to service and improvement at every level. The range of awards we won illustrates our willingness to go the extra mile in everything we do and always have an eye on the bigger picture, as well as the details.

After another busy year, we’re looking forward to a well-earned break. But don’t worry, we’ll still be available over the festive season for all our investors and tenants.

We hope you and your family have a wonderful Christmas and happy New Year, and we look forward to working with you in 2024.

Want more?

Are you looking to invest in Perth real estate, rent out your Perth property or find your next Perth rental home? We can help. Get in touch with our specialist Perth rental team today.

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