Perth’s Rental Vacancy Rate: November 2024 Insights
As of November 2024, Perth’s vacancy rate remains notably low, hovering around 1.0%—a sign of a highly competitive rental market. Vacancy rates are a key indicator of rental market health, with rates below 3.0% typically signaling strong demand and limited supply. Let’s delve into what this means for renters, investors, and the broader market.
Why is the Vacancy Rate So Low?
The tight vacancy rate in Perth can be attributed to several key factors:
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High Demand: Migration from both interstate and overseas, particularly from people moving to Perth for work, has surged. The city’s affordable living costs, growing job opportunities (especially in resources and healthcare), and lifestyle appeal make it a magnet for new residents.
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Limited Supply: While demand is high, new housing construction has struggled to keep pace, largely due to rising construction costs and supply chain issues. As a result, fewer new rental properties are entering the market.
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Return of International Students: Universities like UWA, Curtin, and Murdoch have seen a significant rise in international student enrolments, driving demand for rental properties near campuses.
Impact on Renters
With such a low vacancy rate, renters are facing increased competition for available properties. This can result in higher rents, faster leasing times, and limited choice. For tenants, it means:
- Higher Rents: Landlords are capitalising on the demand, often raising rents, especially in highly sought-after areas like Fremantle, Scarborough, and the CBD.
- More Competition: Potential tenants may need to act quickly, attend multiple viewings, and even offer above the asking rent to secure a property.
Opportunities for Investors
For property investors, Perth’s low vacancy rate is a positive sign. With high demand and limited supply, investors are seeing stable rental income and capital growth. Some key takeaways for investors include:
- Strong Rental Yields: Suburbs close to the city or near major infrastructure projects continue to provide solid rental returns, with gross yields for houses averaging 4.0% to 5.0%.
- Capital Growth Potential: Areas with low vacancy rates often experience property value growth as demand outstrips supply.
What’s Next for Perth’s Vacancy Rate?
Experts predict that the vacancy rate will remain tight through 2025, driven by strong migration and limited new supply. However, if new housing developments begin to catch up with demand, we may see a gradual increase in vacancy rates in the medium to long term. Until then, renters will continue to face a competitive market, while investors can expect steady returns.
Conclusion
Perth’s vacancy rate of 1.0% in November 2024 reflects a healthy, albeit competitive, rental market. Both renters and investors need to stay informed as the city’s strong demand and limited supply continue to shape the landscape. For investors, it’s an opportune time to capitalise on high yields, while renters should be prepared for a fast-moving market.
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