Keen observers of the Perth property market will have noticed a subtle shift in rental prices in recent months. 

After staying fairly stagnant throughout much of 2024 - including 8-straight months where the median dwelling rent remained unchanged at $650 per week - prices have started to tick up again.

According to the most recent data from REIWA, the median rental price for a dwelling in Perth was $680 per week at the end of March.

This means rental prices have increased nearly 5% in the past 4 months alone.

While that may not sound like much, it’s important to remember Perth’s massive run on rental prices that occurred during-and-after covid, when weekly rents grew 75% between July 2020 and early 2024.

With that in mind, the plateau we saw in the back half of 2024 was to be largely expected as, like all markets, prices do run in cycles. 

What wasn’t expected, though, was this second bump in rental prices that we are currently seeing.

What’s driving the recent rental price bump?

On most indicators, the heat is coming out of the Perth rental market.

Population growth has slowed from its recent peak of 3.4% in September 2023 to about 2.5%, according to the most recent ABS data from September 2024. 

Rental listings in Perth have also climbed about 15% over the past year, meaning there is more supply coming into the market. 

That’s helped push Perth’s rental vacancy rate to 2% - the highest it's been since June 2020.

But despite Perth’s population growth slowing and more rental stock hitting the market, these metrics are still pretty tight.

REIWA considers a balanced rental market when the vacancy rate is sitting between 2.5% and 3.5%. So based on that, Perth is still undersupplied.

And while population growth is slowing, it’s still well above (according to the most recent data) the state’s long-term average of about 1.8%. 

With all that in mind, it’s easy to understand how there might be upwards pressure on rental prices. 

It should be said, though, that rental prices are more than just a combination of vacancy rates and population growth, as things like shifts in household sizes and general consumer sentiment can also impact pricing.

Will the recent rental price bump continue?

Regardless of what’s happened in the past, property investors and tenants alike are more concerned about what will happen in the future.

So will this recent increase in rental prices evolve into a more sustained run, or is it just a blip as the market continues to adjust after the post-covid boom?

All things being equal (in relation to Perth’s current economic outlook), we don’t expect another covid-style spike in rental prices.

More likely than not, the recent increase in rental prices will be temporary as Perth continues to record slower population growth and more rental listings hit the market.

Of course, Perth is not just one single rental market. For property investors in Perth, it’s critical to understand what’s happening in your local area.

On the ground our teams are seeing varied results across the entire metropolitan area with some home opens still drawing 20-plus groups through, while properties in other suburbs will only have a handful of groups at viewings.

The important thing is to price your rental based on the type of property you own, as well as the supply and demand factors happening within its suburb.