As we welcome the new year, the Perth rental market presents both opportunities and challenges. While 2024 saw market stabilization, significant shifts were limited. With rates expected to drop this year and sales listings on the rise, 2025 may bring more substantial changes. By reflecting on the trends observed in late 2024, we can anticipate what lies ahead for Perth renters and property owners. Here are our Perth Rental Property Predictions for 2025:

Late 2024: A Snapshot of Market Activity

The end of 2024 brought a typical holiday slowdown in rental market activity. For example, an NRAS property in Caversham initially attracted 65 attendees across two home opens in December. However, since the office closed for Christmas, inquiries surged to over 200 tenants waiting for the next inspection. This highlights that even in less desirable locations, renters are eager to secure affordable living options.

Days on Market and Vacancy Rates

According to REIWA, rental days on market remain low, with the median falling from 18 days to 16 last month, showing properties are being leased quickly. Renters, however, might find some relief in the increasing availability of vacant properties. REIWA reported a vacancy rate of 1.7% in November 2024—a full percentage point higher than the same time in 2023.

This increase reflects several factors, including first-home buyers leaving the rental market to build or purchase homes, freeing up properties. Seasonal fluctuations, improved rental stock availability, and a rise in share housing arrangements have also contributed to this shift. While still below the balanced market range of 2.5% to 3.5%, this uptick suggests the rental crisis may be beginning to ease.

Factors Influencing Rental Supply

The rental market is seeing subtle changes in supply dynamics. First-home buyers transitioning to ownership are releasing properties back into the rental pool. Additionally, changing living arrangements, such as increased share housing and downsizing families, are influencing rental availability.

Addressing Perth’s Housing Shortage

To tackle Perth’s housing challenges, strategic infill development and sensible urban planning are crucial. Medium-density developments, affordable housing initiatives, and mixed-use complexes near public transport hubs could significantly expand the housing stock. These approaches not only provide diverse options for renters but also maximize land use efficiency and alleviate market pressures.

Rental Activity Statistics

Recent REIWA data showcases the fluctuations in leasing activity:

• For the week ending January 5th, 244 properties were leased—a 6.6% increase compared to the previous week (week of Christmas vs. first week of the new year).
• This figure, however, is 62.1% lower than four weeks prior and 20.5% lower than the same period last year. Despite these declines, leasing activity is expected to normalize in the coming weeks as the market resumes post-holiday operations.

Balancing supply and demand remains essential. Increasing incentives for new developments, streamlining approval processes, and implementing affordable housing policies are key steps. Additionally, government initiatives to attract skilled tradespeople could help address construction bottlenecks, ensuring new builds are completed on time.

Predictions for 2025

Looking ahead, the rental crisis is expected to ease gradually as supply increases through new builds and vacancy rates stabilize. However, the success of these efforts hinges on the availability of trades to meet construction demands. The government’s incentives to attract trades to Perth are a step in the right direction, but time will tell if these measures are sufficient to bridge the gap.

For renters, 2025 may bring more options and slightly reduced competition, although the market is likely to remain fast-paced and dynamic.

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While 2025 offers hope for Perth renters, significant challenges persist. By focusing on strategic growth and addressing the root causes of the housing shortage, Perth can work toward a more balanced and sustainable rental market.

Staying informed and proactive will be key for both renters and property owners navigating this evolving landscape. For personalised guidance or to explore our property management services, contact us today.

Stay tuned for more updates and insights from Real Property WA as we continue to monitor and analyse the evolving property market landscape. Visit our social pages or subscribe to our monthly newsletter.