Perth’s median rental price has remained steady at $650 a week over the June quarter for the first time in almost three years, putting an end to a record-breaking stretch of escalating prices.
The latest Domain Rent Report revealed rent growth in the state’s capital lasted 10 quarters for houses and 16 for units.
The rise in Perth rents has stalled for the time being.Credit: Fairfax Media
Domain chief of research and economics Nicola Powell said despite the easing growth, rents remained at record highs and annual growth remained the highest of all the capital cities.
“Perth offers investors the second-highest yields of all the capital cities, with the gross rental yield close to its record high for houses and units,” she said.
“Perth’s vacancy rate is now at a two-year-high. However, it remains firmly a landlords’ market at 0.6 per cent.
“While the rise could indicate a turning point for potential tenants, it has remained below 1 per cent for almost four years, cementing its status as the second most competitive city.”
City Beach is the most expensive place in Perth to rent at a cost of nearly $1300 a week compared to the cheapest suburb of Medina ($480 per week).
Real Estate Institute WA chief-executive Cath Hart said there were clear signs the rental market was slowly changing.
“Rents have been stable for a number of months, properties are taking longer to lease and the number of listings continues to rise,” she said.
“While the change isn’t reflected in all the data, our members at the coalface are reporting that conditions are slightly less frenzied than they were previously.
“We aren’t out of the woods yet as WA is still recording strong population growth and new housing completions remain low.”
Hart said the change was due to new supply and ‘self-moderation’ of demand as tenant household sizes increased and people avoided renting where possible.
Nearly 2500 properties were available for rent at the end of June – 17 per cent higher than the same time last year.
But Arcadis chief construction costs surveyor Matt Mackey said an estimated 92,000 additional homes were needed in the state by 2027, to account for the growing population.
Modelling shows a maximum of just 67,000 can be delivered in this timeframe.
Mackey said despite growing demand, developers were struggling to get residential projects to stack up due to elevated construction costs, expected to escalate by 7 per cent over 2024, the highest of Australia’s four major cities.
“Large-scale housing projects – including build to rent and social affordable housing schemes – are few and far between,” he said.
He welcomed state planning reforms in March aimed at cutting red tape, but said it was unlikely it would improve the challenges posed by excessive construction costs, lower productivity and market capacity constraints.
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