‘Poverty trap’: Perth is now the second most expensive city to rent in Australia

Perth’s massive surge in rental costs over the past six years has made it one of Australia’s most expensive cities to be a tenant.

New data released by the Australian Bureau of Statistics places WA second only to NSW in terms of median weekly rent. The state has also had a bigger jump in rental prices of any state in the country.

Are more apartments in Perth the answer to our rental crisis?

While Victoria, Queensland, South Australia, Tasmania, the Northern Territory and the ACT enjoy median rent prices below the $500 a week mark, the average rent in WA is now $613 – only narrowly cheaper than NSW’s $650 a week.

Shelter WA chair Kieran Wong said the rental market in WA was now a poverty trap and a driver of homelessness.

“As chair of Shelter WA since 2019, I’ve seen the rental crisis worsen each year and impact people that should be unthinkable in a prosperous state,” he said.

“The rental market used to be a stepping stone into independence or home ownership – it’s now a poverty trap or worse.”

Wong said the not-for-profit had been calling for a stronger response to the crisis, including an affordable rental supply scheme and urgently progressing reforms to the Residential Tenancies Act, which included rent stabilisation.

“Skyrocketing rents and the severe undersupply of rental homes, with vacancy rate still under 1 per cent across WA, are now a key driver of homelessness,” he said.

“Almost one third of Western Australians rent, and figures like this once again show they deserve serious attention and intervention. This situation simply cannot continue.”

James Limnios, Managing Director of Limnios Property Group, believes the surge in rates is due to a lack of new apartment developments, especially in the inner-city area.

James Limnios, managing director of Limnios Property Group.

“There is now a chronic undersupply of rental apartments and other low-density homes such as townhouses in the inner city of Perth due to years of very low building approvals in the area,” he said.

“This is underlined by the latest building approval figures, which show that there were only 287 building approvals for apartments in Western Australia during April 2025, which was less than the figure ten years ago, back in April 2015, when 672 apartments were approved.”

Limnios said the ABS analysis, which was based on surveying around 480,000 rental properties throughout the country, also revealed that rents had started to stabilise in most jurisdictions throughout Australia, except in Perth.

During April this year, rents in Perth increased by $16 per week to $616 per week after being stagnant for the previous five months at $600 per week.

During the same month, figures show there were only 287 building approvals for apartments in WA, which was less than the figure ten years ago. In April 2015, 672 apartments were approved.

“Apartments are a critical part of our housing stock, as around 28 per cent of renters live alone,” Limnios said.

“This huge demand for rental accommodation compared to supply has seen the median weekly rent in some inner-city suburbs such as East Perth surge by 17.5 per cent over the past year.

“In comparison, in the outer-city suburbs such as Baldivis, where much of our housing construction boom is occurring, weekly rents have increased by just 3.2 per cent over the past 12 months.”

Limnios believes further pressure will be placed on the market next year when the ECU college campus in Northbridge opens, with more than 10,000 students and staff needing accommodation.

“A major priority should be independent review of nuisance red-tape regulations both at state and local government, which are slowing down new developments,” he said.

“We need to stop this growing tyranny of death by hundreds of red-tape cuts so we can urgently remove unnecessary financial costs and delays to the approvals process.”

Limnios also believes GST on the construction of new apartments should be removed and banking regulators should remove rules that make banks more reluctant to help fund higher-density housing projects, especially for small developers.

“The banks should be forced to offer more flexible lending packages to smaller developers and not the current one-size-fits-all approach,” he said.

“This could include special loans for small to medium-sized developers that wish to keep the building for build-to-rent purposes.

“We also need a package of enhanced financial incentives to help kick-start these inner-city developments, such as cutting stamp duty and reducing land tax rates for shovel-ready inner-city housing developments.”

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