Perth Rental Market Quarterly Update

As we move through 2024, the Perth rental market is experiencing notable trends and shifts. Whether you’re a tenant seeking a new home or a landlord navigating property management, staying informed about current market dynamics is essential. 

At D Residential Group, our Perth property management experts are dedicated to helping you understand and adapt to these changes. Here’s an in-depth look at the Perth rental market during the second quarter of 2024 (April to June), with insights to guide you through this evolving landscape.

Rental Rates and Yields: Sustained Growth Amid Economic Pressures

Despite the economic headwinds, Perth’s rental market has shown steady growth. The latest CoreLogic report reveals that the median rent for houses has reached $650 per week, while units command a median rent of $600 per week. With this, properties typically spend an average of 19 days on the market before being leased.  

Over the past year, Perth has recorded the highest annual rent increase among Australia’s capital cities, with a remarkable 13.2% rise. 

Perth’s rental market experienced a tightening of vacancy rates during April-June, at 0.5%, down from 0.7% last year. This decrease in vacancy rates indicates a competitive market with higher demand for rental properties.

However, as home values have increased, Perth’s gross rental yields have slightly declined from 4.89% to 4.4% over the past year. Nevertheless, this figure remains well above the national gross yield, which has been stable at approximately 3.7% for the last 19 months.

These trends indicate that Perth’s rental market is performing well, with rising rents and tightening vacancy rates, even in the face of broader economic challenges.

Stabilisation of Rents: A Sign of Market Maturity?

For the first time in several years, Perth’s median rents have stabilised since March 2024, signalling a potential shift toward a more balanced market. Despite this stabilisation, rent levels remain at record highs, and Perth continues to experience significant growth in home values.

Notably, Perth recorded the highest quarterly increase in home values among Australia’s capital cities, with house values rising by 6.4% and unit values by 6.8%. 

These developments suggest that while the market is gradually balancing supply and demand, it remains robust, with strong rental growth and low vacancy rates.

Spotlight on Suburbs: Top Performers and Affordable Options

The Perth rental market has shown significant performance across various suburbs, with some of the most affordable areas also experiencing significant growth. For instance, Viveash has emerged as the top suburb for annual price growth, with a 40.9% increase, bringing its median rent to $750 per week . Other top-performing suburbs include Hillman, Armadale, Midvale, and Shelley.

On the other end of the spectrum, Medina stands out as the most affordable suburb for house rentals, with a median rent of $530 per week and an annual price growth of 25.3%. For units, Cottesloe has led the way in price growth, with a median rent of $1,400 per week and a 50.9% increase in prices. Thornlie, Balcatta, Banksia Grove, Belmont, and Bentley are among the most affordable suburbs for unit rentals, with median rents around $680 per week.

Vacancy Rates Update: Slight Increase but Still Competitive as of August 2024 

Perth’s rental market has seen a slight increase in vacancy rates, which have risen to 0.6% as of August 2024, up from 0.5% last quarter. While this slight uptick may indicate a small easing in the market, the vacancy rate remains exceptionally low compared to historical standards. This ongoing tightness in the market continues to fuel strong demand for rental properties, maintaining pressure on rental prices.

Tips for Renters

1. Act Quickly: Given the competitive market, it’s important to act swiftly when you find a property you like. Ensure all your documentation is ready to expedite the application process.
2. Negotiate Terms: Familiarise yourself with current market rates in your desired area and be prepared to negotiate rental terms to secure the best deal.

Tips for Landlords

1. Price Competitively: Stay updated on local rental trends to ensure your property is priced attractively. Adjusting your rent in line with market conditions can help attract quality tenants.
2. Property Maintenance: Regular maintenance and updates to your property can enhance its appeal and command higher rental rates. A well-maintained property is more likely to attract reliable tenants and reduce vacancies.

As Perth's rental market continues to evolve, understanding current trends is crucial for both landlords and tenants. With vacancy rates remaining low and rental demand high, now is the time to ensure your property is optimally positioned in this competitive market. Whether you're looking to attract quality tenants or maximise your rental returns, staying informed and proactive is key.

For more insights into the rental market or assistance with managing your property, contact us at D Residential Group. 

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