The rental crisis plaguing Perth continues to deepen, with fresh data showing house and unit prices across the state have hit record highs amid strong migration and plummeting vacancy rates. Photo: WAtoday
In both categories, Perth recorded the steepest annual increase of all the nation’s capital cities — marking the ninth consecutive quarter for house rents and the sixth for units.
And prices across the rest of Western Australia experienced a similar spike, with the median asking price for houses rising 18 per cent to $590 and 15.3 per cent to $490 for units over the past year.
The shock data comes just months after Domain revealed the rental vacancy rate in Western Australia had dropped to just 0.4 per cent, making it one of the most competitive cities for prospective tenants.
A rental market is considered balanced when the vacancy rate sits between 2.5 and 3.5 per cent, according to the Real Estate Institute of Western Australia.
Domain chief of research and economics Dr Nicola Powell said it was strong net interstate and overseas migration continuing to drive rental demand in WA.
“Western Australia has the strongest population growth out of all the states and territories, ultimately driving a high need for housing demand which hasn’t been met by enough supply,” she said.
“Again, it is due to a lack of supply and given the rising purchasing prices, it hinders tenants ability to transition to a homeowner.
“This led to an extremely competitive rental market for tenants.”
And the rate of growth was laid bare in fresh data released by the Australian Bureau of Statistics last month, which showed WA’s population was growing faster than any other state — ballooning by more than 86,000 people between 2022/23.
More than 84 per cent of that growth was the product of overseas and interstate migration.
But Powell said she expected the rental market to reach a tipping point in 2024 which would restore balance, with the vacancy rate having already lifted marginally from November’s record low of 0.3 per cent.
“Overall, we do anticipate a rise in the number of properties towards the end of 2024,” she said.
“The slowing quarterly rental gain might be a reflection of affordability biting – tenants consolidating homes [house shares], seeking more affordable suburbs, and property types or forgoing an additional bedroom.
“This means a shift in demand which will help with supply.
“We are also likely to see some renters transitioning to homeownership with the new first-home buyer incentives in place, such as the anticipated federal government’s ‘Help to Buy’ shared equity scheme, along with a potential interest cut that will improve borrowing capacity and mortgage affordability.”
Suburbs in the state’s resources hub of Karratha experienced among the sharpest annual increases, with the median weekly rent climbing 45.5 per cent to $1200 in Nickol and 35 per cent to $1350 in Baynton.
And the market was much the same in the country’s iron ore nexus, with the average Port Hedland tenant paying $1200 per week in rent, a 33.3 per cent increase year-on-year and a 118.2 per cent jump since 2018.
The skyrocketing rental price puts the North West town on par with Perth’s affluent western suburbs, with median rents in Dalkeith and City Beach sitting at $1200.
And Cottesloe, Mount Claremont and Swanbourne were not far behind, deemed among the most expensive places to rent in the Perth metropolitan area.
Perth’s south-east experienced among the greatest year-on-year increase, with the median rental price in Armadale climbing 38.7 per cent to $430 and 29.6 per cent to $545 per cent in Seville Grove.