There are growing signs that the rental market in Perth is easing, with median rents holding steady for a second straight month.
Real Estate Institute of Western Australia (REIWA) Chief Executive Officer, Cath Hart, said the latest data showed the median weekly dwelling and house rents held steady at $650 per week in May, while the median unit rent was stable at $600.
“Members are reporting properties in higher price brackets taking slightly longer to lease, with fewer offers of higher rent and, in some cases, discounting,” Ms Hart said.
“There is some new supply coming onto the market, particularly in the northern corridor.
“Plus, some tenants are finally able to move into the homes they have built, which is also slowly freeing up some established supply.”
She said affordability was a key driver of the market and tenants had been responding to the price rises of the past few years by renting smaller, more affordable properties, or increasing the number of tenants in a house.
“Others are getting off the rental roundabout by buying a home where possible, staying in the family home longer or moving back home,” she said.
“Landlords should speak to their property manager about market conditions in their particular area when it comes to renewing or signing new leases.
“It is often best to retain a good tenant than try and chase price increases.”
Ms Hart said it was too early to know whether the recent stability in rental prices would continue.
“While there has been a noticeable change in parts of the market, it isn’t across the board – for example, there is still a lot of competition for the more affordable homes,” she said.
“In addition, WA’s overall vacancy rate remains at a near-record low and we haven’t seen a meaningful increase in the number of rental bond lodgements.
“We will keep watching to see if the current moderation in the rental market is a longer-term, more widespread trend.”
Despite slowing down, rents remain significantly higher than a year ago.
According to REIWA, the suburbs that saw the most growth in their median weekly dwelling rent price in May were Como (up 8.3 per cent to $650), Armadale (up 5.8 per cent to $550), Balga (up 5.5 per cent to $580), Bentley (up 5.4 per cent to $620) and Cloverdale (up 4.3 per cent to $605).
There were 2409 properties available for rent at the end of May, which was 11.3 per cent higher than April and 20.5 per cent higher than the same time last year.
“We have seen rental listings slowly increasing over the past couple of months as a result of some new supply coming to the market, which is great news,” Ms Hart said.
Homes leased in a median of 16 days during May, unchanged from April and one day slower than 12 months ago.
The suburbs that recorded the fastest median leasing times were Westminster (nine days); Innaloo, Balga, Morley and Nollamara (10 days); Dianella, Kelmscott, Mount Lawley and Success (13 days); and Yanchep (14 days).
While there was stability in the rental market, property prices continued to climb in May.
The median house price was $650,000, up 3.2 per cent on the $630,000 reported in April and 17.1 per cent higher than May 2023.
The median unit sale price increased 2.1 per cent to $435,000, up from $426,000 last month, and 8.7 per cent higher year-on-year.
“Demand for established housing remains strong, fuelled by population growth, a constrained building industry and challenges in the rental market,” Ms Hart said.
“When dwelling prices rise strongly we usually see more people choosing to build and a slowing of price growth for established homes.
“Anecdotally there is definitely demand for new homes, with developers reporting strong land sales, but there is limited capacity in the building industry to address this demand.
“Builders and developers have also flagged the low number of available new lots as an ongoing concern.”
The suburbs that saw the most median house sale price growth in May were Stirling (up 2.9 per cent to $1,080,000), Beckenham (up 2.7 per cent to $585,500), Bertram (up 2.7 per cent to $554,500), Armadale (up 2.4 per cent to $445,500) and Secret Harbour (up 2.2 per cent to $670,000).
There were 3291 active listings settled at the end of May – 4.5 per cent lower than April and 41.5 per cent lower than a year ago.
“We can expect active listings to remain low as homes continue to sell extremely quickly,” Ms Hart said.
“This doesn’t mean there are no homes coming to the market, simply that they are selling almost as soon as they become available.
“This keeps the number of active listings of advertised homes low.
“For example, this time last year there were 5629 active listings and it took 12 days to sell a house and 22 days to sell a unit.
“Two years ago, there were 8324 listings and it took 14 to sell a house and 28 days to sell a unit.”
