After several years of high-pressure “crisis” conditions, the Western Australian rental market is finally showing signs of a steadying pulse. For the first time in 18 months, we are seeing a consistent—if slow—improvement in the metrics that define a healthy market.

While we are certainly not “out of the woods” yet, the data suggests we are moving away from the emergency levels seen in 2023 and 2024. However, as we find ourselves in this delicate period of recovery, the conversation around rental legislation—specifically “no grounds” terminations—has reached a fever pitch.

The Current State of Play: Easing, but Still Tight

The most encouraging news for the Perth rental market is the recent shift in the vacancy rate. Throughout 2025, the vacancy rate sat above 2 per cent, a significant recovery from the record-shattering low of 0.4 per cent we experienced in March 2024.

While rent prices remain at record highs, the rate of growth has slowed significantly. In January 2026, the median dwelling rent sat at $720 per week. This represents a more sustainable trajectory than the double-digit percentage hikes seen in previous years. Active listings for lease, while still below historical averages, have finally achieved month-to-month stability.

The Looming Risk: “No Grounds” Terminations

Despite these positive trends, the industry is hearing renewed calls to remove “no grounds” terminations. Proponents argue this will improve security for tenants, but a look at the data—and at our neighbors—suggests a much riskier reality.

Lessons from New Zealand: The Cost of a “War on Landlords”

Western Australia is often encouraged to look at other jurisdictions that have already moved to ban no grounds terminations. New Zealand is perhaps the most striking example.

In 2020, the NZ government banned no grounds terminations as part of a wider suite of rental reforms. By 2025, that ban was repealed. The reason? The results were devastating for the very people the legislation aimed to protect. According to NZ Minister of Housing Chris Bishop, the previous government’s approach essentially “waged a war” on landlords.

  • The Fallout: Thousands of landlords exited the market entirely.
  • The Impact: Since 2017, rents in NZ rose by an average of $170 per week, the social housing waitlist swelled by 20,000 families, and thousands were forced into emergency housing motels.

The Victorian Experience

Closer to home, Victoria introduced strict tenancy legislation and removed no grounds terminations. According to the Homes Victoria Rental Report, the number of rental properties in the state declined by 3.2 per cent between the September 2023 quarter and the June 2025 quarter. This disinvestment occurs at the exact moment when more supply—not less—is desperately needed.

The Investor Sentiment: A 74% Red Flag

In Western Australia, we have already seen what happens when investors leave. Following the end of the COVID rental moratoriums, nearly 20,000 properties (8.4% of our total rental stock) were removed from the market. This exodus was the primary driver behind the plummeting vacancy rates and soaring prices of the last two years.

We know that investors are incredibly sensitive to legislative change. A 2025 REIWA Housing Issues survey revealed:

  • 74% of respondents said legislative changes would influence their decision to sell.
  • 62% of potential investors said it would deter them from entering the residential market at all.

The “What If” Question

When we discuss these changes with policymakers, the common rebuttal is that investors won’t actually sell en masse. But at our agency, we have to ask: What if you’re wrong?

Is the risk of returning to crisis conditions worth the gamble? WA simply cannot afford to lose any more rental properties. Population growth remains the highest in the nation, and construction constraints mean new supply is slow to hit the ground. Our priority must remain on maintaining and growing the “delicate” supply we currently have.

Navigating the rental market requires more than just looking at the numbers—it requires an understanding of the laws and trends that shape your investment’s future. If you are considering selling, or simply want to know where your property stands in this changing landscape, reach out to our team today for a free, professional appraisal.