Reflecting on Perth’s Rental Market in 2024
As 2024 draws to a close, it’s worth reflecting on the dynamics of Perth’s rental market over the past year. The city has experienced significant shifts in supply and demand, shaped by economic factors, migration patterns, and changing lifestyle preferences. Let’s unpack the key trends of 2024 and explore what 2025 might have in store.
A Year of Challenges for Renters
Perth’s rental market remained tight throughout 2024, characterized by low vacancy rates and rising rents. The population growth driven by interstate and international migration played a major role in boosting demand. Many families and professionals were drawn to Perth’s comparatively affordable lifestyle and robust job opportunities, particularly in mining, construction, and technology.
Average rents for houses and apartments increased by approximately 10-15% in some areas, with the northern suburbs like Joondalup and Clarkson seeing particularly steep rises. The southern suburbs, including Rockingham and Mandurah, also experienced heightened demand as renters sought more affordable options.
Factors Driving the Market
- Economic Growth: Western Australia’s economy remained strong, bolstered by a thriving mining sector and public infrastructure projects. This economic stability attracted workers, creating additional demand for housing.
- Low Housing Supply: Limited new housing developments exacerbated the pressure on the rental market. Construction delays and higher costs made it challenging for developers to meet the growing demand.
- Lifestyle Preferences: The trend towards remote work continued to influence renters’ choices, with many prioritizing homes with larger spaces and access to amenities over proximity to the CBD.
Government Interventions
In response to rising rents, the WA Government implemented several measures, including:
- Rental Caps: Restrictions on annual rent increases aimed to provide relief to tenants but faced criticism for potentially discouraging new investments in rental properties.
- Incentives for Developers: Programs to encourage the construction of affordable housing units were introduced, but their impact is yet to be fully realized.
- Support for Renters: Expanded rental assistance programs helped some households cope with financial pressures.
Looking Ahead: 2025 Predictions
While the challenges of 2024 are unlikely to disappear overnight, there are reasons for cautious optimism as we head into 2025.
- Increased Housing Supply: Several residential projects initiated over the past two years are expected to reach completion in 2025. This should ease some pressure on the rental market, particularly in outer suburbs and regional areas.
- Market Stabilization: As the initial post-pandemic migration surge tapers off, demand growth may moderate. Combined with new housing stock, this could lead to a stabilization of rental prices.
- Continued Focus on Affordability: The government is likely to expand its initiatives to address affordability, including incentives for build-to-rent developments and subsidies for low-income renters.
- Technology and Transparency: Advances in property technology could enhance the rental process, making it more efficient and transparent for both landlords and tenants. Expect more widespread adoption of virtual inspections, smart leasing platforms, and AI-driven market analysis.
Areas to Watch in 2025
- Southern Growth Corridors: Suburbs south of Rockingham, like Baldivis and Karnup, are poised for growth as infrastructure projects improve connectivity and attract new residents.
- Sustainability Trends: Eco-friendly developments and homes with energy-efficient features are likely to become more popular, driven by both consumer demand and regulatory changes.
- Rental Market Diversification: Shared housing and co-living spaces may gain traction as affordable alternatives, especially among younger renters.
Final Thoughts
2024 was a challenging year for many renters in Perth, but it also highlighted the resilience and adaptability of the city’s housing market. As we look to 2025, a combination of increased housing supply, policy interventions, and innovative solutions could pave the way for a more balanced and sustainable market. For renters and landlords alike, staying informed and adaptable will be key to navigating the year ahead. Thinking of moving to Perth in 2025? Get in touch with us to see how we can help make that dream become a reality. www.e-sterlingservices.com.au