The Perth rental market is experiencing a shift, with the vacancy rate reaching 2% in January 2025, according to the latest REIWA data. This marks a slight increase from the 1.9% recorded in December 2024, a notable change in a market that has seen prolonged periods of extremely low vacancy.
A Look at the Numbers
The last time Perth’s vacancy rate hit 2% was back in June 2020. This recent increase signals a potential turning point in the market, prompting questions about its future direction.
REIWA CEO Cath Hart attributes this shift to a combination of factors impacting both demand and supply. “The vacancy rate is a reflection of demand and supply, and these factors have been changing over the past six months,” she explains.
Key Factors Influencing the Market
- Moderating Demand: Changes in tenant behavior, such as increased household sizes, more people opting to buy, or staying with family to avoid high rental costs, have contributed to a slowdown in demand.
- Increased Supply: The completion of new investor builds and tenants moving into their own newly built homes have added more properties to the rental pool.
- Suburban Variations: While the overall vacancy rate is rising, conditions vary across Perth. Inner-city suburbs continue to experience strong demand and low vacancy rates, while areas with a high volume of new builds are seeing longer vacancy periods.
What This Means for Renters
The slight increase in vacancy rates could offer renters more choices and potentially reduce the intense competition seen in recent months. However, it’s crucial to remember that the market remains tight, and desirable properties are still likely to be snapped up quickly, especially in popular suburbs.
What This Means for Investors
For investors, the rising vacancy rate indicates a need for strategic property management. Understanding the local market dynamics is crucial for minimizing vacancy periods and maximizing returns. Properties in areas with high demand will likely continue to perform well.
Towards a Balanced Market?
REIWA considers a balanced market to have a vacancy rate between 2.5% and 3.5%. The last time it was 2.5% was September 2019. Ms. Hart suggests that if current trends continue, Perth’s vacancy rate could reach equilibrium by mid-2025.
Holdsworth Real Estate: Your Local Property Experts
At Holdsworth Real Estate, we understand the complexities of the Perth rental market. Whether you’re a renter or an investor, our team is here to provide you with expert guidance and support. We stay up-to-date with the latest market trends to help you make informed decisions.
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