Perth Rental Crisis 2024 – Fewer Choices, Higher Prices

Perth’s current rental climate is looking bleak for renters but great for investors. While general rent costs are expected to increase by 7 to 10% this year, the Perth rental crisis is seeing projections of almost twice that –10 to 15% increases for renters, in line with the year-on-year 10% rise. And that’s after a hike of 20% in 2023.

Pair this with a wage increase of just 4.6% in Western Australia last year and bottlenecks in the construction industry for new-home projects. The future may be looking uncertain for those renting in Perth.

What’s Behind the Rental Crisis in Perth?

The Perth rental crisis is a result of the combination of the economic landscape and government policies regarding leasing property. Here’s a deeper dive:

Economic Factors

Western Australia has an unemployment rate of less than 4% and a robust mining industry, which contributed around $200 billion to the economy in 2023. These factors push the rental prices in Perth up in the market, with the assumption being that there’s more disposable income in the economy.

However, with bottlenecks in the government’s plans to build new houses, more people are being forced to rent while they wait for houses to be built. And with the WA population growing by close to 3% in 2023, the state is full of people who need places to live.

Western Australia’s economic growth is leading to a higher demand than we have supply, which opens the door for rental price rises. We’re also seeing more people per household than ever before.

WA Rental Policies

In Western Australia, there’s no cap on how much property owners can increase their rent, although there are time restrictions as to when it can be done.

• Periodic tenancies: Rent can be increased every 6 months, but the landlord must provide a 60-day notice.
• Fixed-term leases: If the increase is not written into the initial agreement, rent may not be increased for the duration of the lease, but it may be increased when renewing. If the increase is written into the initial agreement, then the homeowner can increase the rent during the lease according to those terms.

Rental increases depend on the personal choices of the homeowner. As Perth’s property market changes and competition for rental properties gets fiercer, some landlords may take advantage of rental increase policies to cover their own costs and expenses.

Surviving the Perth Rental Crisis 2024: A Renter’s Guide

Are you in the rental market in Perth? It’s a tough place to be, but with some advice and a bit of luck, you can not only survive the Perth rental crisis but thrive as the market changes. Here’s what we recommend.

Don’t Move Unless Necessary

If you’re already renting a spot and managing to cover it, stay put. Property-hopping isn’t advised –with a vacancy rate of just 0.7%, it’s not easy to find an available spot to suit your needs.

The limited supply of housing versus the forecast population growth could spell disaster, as rental demand far outweighs rental supply. Rather, build a good relationship with the property owner, which may put you in a good position to take the next step if necessary: negotiating.

Negotiate with the Property Owner

The Perth property market is in a difficult phase, but many house owners would prefer to keep good tenants rather than advertise and find new ones. If you find yourself in rental trouble, negotiating with your landlord may help keep rent down to manageable levels.

When it comes to rental increases, you can reach out to the Magistrates Court if you feel your rental increases are too high. You can argue against the increase or request a reduction, which may ease your rental stress. However, this might put a strain on your relationship with the property owner.

Consider a Rent Relief Program

If you find yourself in arrears and facing eviction during the Perth housing crisis, there is a potential light at the end of the tunnel. Western Australia’s Rent Relief Program offers one-off lump sum payments to tenants who need to pay their arrears to avoid being evicted.

The program also provides support and help in negotiating with the landlords, as well as extra resources for those in need. Find out if you’re eligible, and it could take some rental stress off your plate.

Investing in the Current Climate: Opportunities and Risks

Planning on buying a rental property in Perth? Median house prices are reasonable, despite the rental crisis. Here’s our advice for property investors looking to get into the rental market.

Competition for Properties is High

With the low vacancy rate, competition is HIGH. This means that property owners can afford to raise their prices because of the fierce competition. Likewise, some owners may increase their rent to match similar properties in the area.

Lowering your rent may increase your chances of getting a tenant, but it may not be feasible for some investors. In the interest of ethics, you might also want to check out the rental market for similar properties and make sure you’re being fair without lowering your rental yields too much. Need help? Our property management team is here to assist and take the stress out of renting your property.

Consider Higher Interest Rates

Rent prices in Perth have skyrocketed by around 15% year after year, which leads to higher interest rates for investors. Consider interest rates before investing, and analyse the market predictions to get an idea of what it’s likely to look like in the future.

Conclusion: What’s the Rent Prediction for Perth?

How much will Perth property prices be in 2024? What’s the property market prediction for Perth in 2025? Will the Perth rental crisis ease up? These questions aren’t easy to answer, and the market can change on a dime. Here’s what we can expect going forward.

Even with the low availability of Western Australian rental properties, WAtoday reports that there’s a strong demand for properties for sale. Moreover, in January 2024, The Guardian noted that the average time a house stayed on the market before being sold was less than 2 weeks. However, home loans are becoming increasingly more difficult to get, so the property surge may slow slightly.

Perth’s strong population growth (3.1% in 2023) is expected to keep rising, bringing more workers to bolster the economy but placing more strain on the rental market. With the government’s housing project stalled by bottlenecks, the rental crisis in Perth is set to continue.

Read our other articles for further information:

• Average Rental Price in Perth 2024
• Perth Property Market
• Guide to Repairs to Rental Property

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