Stark reality of WA rentals in 2024

On 15 January, CoreLogic released their latest Quarterly Rental Review Report, declaring that the national rental market has “well and truly passed the peak of the recent rental boom”, indicating a slow return to pre-pandemic rental price growth.  But while this headline strikes a hopeful tone, it does not mean rental affordability is in sight for renters any time soon.  

The following key findings paint a stark picture of the state of rental affordability in Western Australia over the past year: 

• Renters on a median household income were spending 33% of their annual pre-tax income to service the median rent, the highest portion since CoreLogic started tracking rental affordability in 2006. 
  
  
• Perth is the country’s second most expensive rental capital at $695 p/w with Sydney being the most expensive at $773 p/w. 

• Perth rents rose by 8.1% in the last year, the highest of all capital cities.  

• Perth’s vacancy rate has increased to 1.4%, which could be caused by demand softening due to decreased net overseas migration to pre-COVID levels, and increased investor activity since the onset of COVID.  

• Since COVID, rents have increased by 36.1% nationally, equivalent to a rise of $171 per week, or $ 8,884 per year at the median level. 

The one positive development in the above key findings is the increase in Perth vacancy rates.  However, although it has increased, it is still well below REIWA’s healthy market benchmark of 2.5% to 3.5%, and below the national average of 2.9%.  And an increased vacancy rate does not correspond to an increase in rental options, affordability, or standards. 
 
The dire situation that Perth renters find themselves in can be attributed in part to our current tenancy laws, which allow landlords to increase rents by any amount they like or evict tenants without any reason if they are unable to afford it.