In 2025, Perth’s rental market is still tight compared to many other Australian cities, although it is beginning to ease. Rental affordability is still under pressure following years of sharp increases, even while vacancy rates have increased from 2024’s extreme lows to a level that is closer to what REIWA refers to as a more “balanced” market. According to national data, rental growth has moderated from its peak and vacancy rates have slightly increased.

However, Perth’s rental stress is expected to persist for portions of 2025 due to supply-side limitations, population movements, and local economic dynamics (resources/energy activity, interstate migration).

By introducing provisions aimed at stabilising rental arrangements and curbing exploitative tactics, policymakers (WA tenancy law amendments) have altered the way property managers should conduct their business.

The environment presents Bargoti Real Estate with an opportunity: proactive property management, astute investment counsel, tenant support that is centred on the community, and effective marketing will safeguard rental yields and client relationships while promoting longer-term market stability.

Key facts to anchor this analysis

• According to REIWA, Perth’s vacancy rate increased to about 2.5% in March 2025, the first time it has reached that level since 2019.
• This suggests that conditions have eased from their previous, far stricter levels.
• Tenant-friendly features (pets, minor alterations, Commissioner dispute process) were adopted as part of WA’s tenancy reforms (phased 2024–2025), which also prohibited rent bidding and altered the regulations governing the frequency of rent increases. Later phases of the reforms will continue into early 2025.
• While vacancy metrics (e.g., SQM Research) indicate a minor gain nationally, rental growth slowed through 2024 and into early 2025 (CoreLogic and other research indicating rent growth cooling).
• Expert forecasters predict that, on the assumption of a slowing population growth and a modest increase in completions, rent growth will moderate in 2025, reaching mid-single digits instead of double digits.

Where Perth was (quick recap): 2021–2024 context

1. Perth’s rental market experienced one of the most significant tightenings in recent memory between 2021 and 2024.

2. The transition started during the COVID-19 pandemic, when the supply chain, travel restrictions, and low building activity limited the amount of new homes that could be delivered.  

3. Western Australia (WA) became a hub for interstate migration after Australia reopened, drawing residents from the eastern states with its robust economy, thriving resources sector, and reasonably priced housing.

4. This rush of new occupants swiftly consumed the available rental stock. Tenants found it increasingly challenging to find a place to live as vacancy rates fell to some of the lowest in the nation, frequently below 1%.  

5. In the meantime, shifting lending conditions, heightened regulatory scrutiny, and worries about market volatility caused some investors to start retreating from particular market areas.

6. The imbalance got worse due to other variables. Stock was taken out of the long-term rental pool by short-term rentals, especially those made through websites like Airbnb.  

7. Another factor was student housing; suburban areas near institutions like Crawley (University of Western Australia) and Bentley (Curtin University) saw a surge in demand due to returning international students.

8. The scarcity was particularly acute in in-demand suburbs close to important job centres, academic institutions, and leisure destinations.  

9. Because of their closeness to the central business district, neighbourhoods like Subiaco and South Perth, for example, experienced intense competition. However, coastal neighbourhoods like Scarborough continued to draw in lifestyle-driven residents.

10. As a result, rents increased quickly and were less affordable for tenants, requiring some to make concessions on property type or location.  

11. Yields for property managers and landlords increased dramatically, but risk concentration also increased; thus, revenue was primarily dependent on retaining good tenants without protracted vacancies or conflicts.

12. In summary, the rental market in Perth at the start of 2024 was characterised by high demand, constrained supply, and severe pressure on affordability, which, depending on which side of the market you were on, created both opportunities and challenges.

The snapshot for 2025: what the numbers say (vacancy, rents, listings)

1. The most apparent change in 2025 has been the slow increase in vacancy rates, which went from very low levels in 2023–2024 to a figure that REIWA released in March 2025 as about 2.5%, a significant psychological threshold (last seen in 2019).  

2. Additionally, the national vacancy rate has increased slightly in 2025, according to SQM and other monitors. A shift away from the “crisis” tightness, rather than a crash, is implied by this.

3. Data from CoreLogic and other sources showed that rental growth slowed in 2024 and 2025. With several months of flat or slightly rising rents in 2025, annual growth rates moderated from the double-digit spikes observed earlier to mid-single digits in many cities by late 2024.  

4. Although the rate of increase has moderated, Perth’s rents are still higher than they were before 2021. Re-entering investors, properties shifting from short-term to long-term markets, and a little increase in new completions have all contributed to the rise in listings in recent months.  

5. However, supply additions are unequal and sluggish among suburbs due to increased development prices and delays in the construction pipeline.

6. Markets strongly favour landlords when the vacancy rate is less than 2%. It’s commonly said that a shift to about 2.5% to 3% is “more balanced,” which should slow down rent increases and shorten rental periods—but only provided demand doesn’t increase once more.

Why is the market changing now? The drivers behind the easing

The following factors account for Perth’s market decline in 2025:

1. Changes in regulations and policies

• Major tenancy reforms were implemented in WA in 2024 (phased into 2025) and included allowances for pets and modifications, a ban on rent bidding, a cap on the frequency of rent increases (often to once every 12 months), and improved dispute resolution.
• These regulations alter the conduct of landlords, causing some to reconsider pricing methods or the investment case, and they also lessen exploitative listing practices, such as holding “auctions” for tenants.
• Additionally, the reforms provide tenants a sense of permanence, which can reduce turnover.

2. Reduced demand and slower national rental growth

• National rental growth slowed through 2024, according to data; households are hitting affordability thresholds, and rising borrowing rates limited the number of households that could be formed for specific categories.
• In certain areas, demand is also cooled by slower migration and changing household behaviours, such as sharing or going back home.
• Perth is also affected by these national patterns.

3. More listings and changes to the supply

• While properties that were previously on short-term platforms have been moved back to the long-term market (particularly following fluctuations in the tourism season), some investors have returned to the market as rental yields have risen.
• Enough new completions are flooding the market to ease the most severe pressure areas, but not enough to address underlying shortfalls.

4. Local and seasonal economic impacts

• Student movements, labour rotations, state-level economic activity, infrastructure initiatives, and resource sector cycles can all affect local demand.
• In contrast to many cities, Perth’s economy has been comparatively stable, which encourages ongoing demand for rentals while also drawing in buyers for ownership—a mixed message for rents.

Forecasts for 2025 — will the crisis “ease”?

1. The response is complex: there will probably be some easing, but not a sharp reversal.  

2. In many suburbs, expect extraordinary letting times to shorten and rent growth to moderate gradually. Rather than the double-digits of the boom years, forecasting agencies and firm reports predict mid-single-digit rental growth nationwide through 2025.

3. According to KPMG’s outlook, with current assumptions, predicted annual rent growth for 2025–2026 is between mid-3% and mid-4%. That suggests that rather than collapsing, rents will continue to rise at a slower, more sustainable rate.

What would “real easing” look like?

• Vacancy rates in the Perth metropolitan region are continuously higher than ~3%.
• In certain suburbs, the monthly rent change is almost nil or slightly negative.
• less listing competition (i.e., fewer bidding-like dynamics) and more options for tenants.

How likely is that in 2025?

1. Perth’s March 2025 vacancy rate of about 2.5% indicates directional movement, and some areas may achieve that equilibrium. However, the return of population inflows and structural supply limits may maintain pressure in well-liked areas. In summary: not a solution, but an improvement.

2. Warnings: the easing could be reversed by abrupt economic shocks, changes in interest rates, or faster-than-expected population growth.

(Note: local submarkets will differ significantly from these forecast projections, which are based on publicly available market data and economic outlooks.)

Tenancy law reforms: what changed, and why it matters to agents/landlords

Property managers’ operations will be significantly impacted by the following changes as part of WA’s phased Residential Tenancies reforms (2024–2025):

1. Key reforms (summary)

• Rent bidding is prohibited, which prevents agents and landlords from promoting their preference for an auction-style tenant selection process.
• Restrictions on the frequency of rent increases (for example, many tenancies only allow rent increases once every 12 months).
• Pet policies and minor changes (landlords must have a good reason to deny a tenant’s request for a pet or a minor change).
• Commissioner for accelerated bond disposal and dispute resolution (techniques to lessen the workload of the Magistrate Court and settle conflicts more quickly).

2. Implications for property managers and landlords

• Setting the right listing price from the beginning is more important than ever because rent hikes are limited and rent-bidding is outlawed.  
• Setting prices too high to “test the market” could result in extended vacancy times.
• To support judgments, it will be crucial to communicate with potential tenants and have clear, recorded selection criteria.
• Maintaining good tenants becomes a higher-value goal because rent increases are more restricted.
• To lower churn, invest in upkeep, proactive management, and tenancy benefits (such as pet-friendly regulations when practical).
• Maintain spotless records, including condition reports, communication logs, and inspection notes, as the Commissioner may base decisions on them.

(The goal of these measures is to restore power balance and improve tenancy stability; legally compliant innovative property management will preserve yields.)

Who benefits from the easing — and who loses?

1. Potential winners

• In certain suburbs, tenants have more options, behave less aggressively when listing, and see slower increases in rent.
• Responsible landlords set reasonable prices, maintain their homes, and use long-term tenancy techniques.  
• These landlords will profit from steady revenue and shorter vacancy periods.
• Professional Property Managers (like Bargoti Real Estate): Investors attempting to navigate the new environment will seek out companies that offer superior property management and investor assistance.

2. Potential losers/risks

• High-leveraged landlords: if carrying costs stay high, interest rates remain high, and rental yields marginally decline.
• Speculative investors: those who used sharp increases in rent as justification for acquisitions.
• Undersupplied areas: lifestyle suburbs and inner cities might continue to be pricey and congested, which would disadvantage low-income tenants.

Practical fixes & policy levers (what could genuinely improve Perth’s rental situation)

Coordinated supply-side and demand-side actions are necessary for long-term improvement. This is a helpful, prioritised list of steps that could reduce stress; some are operational, while others are at the policy level.

1. Boost supplies (both immediate and long-term)

• Reduce red tape for infill development, particularly close to employment and transport nodes, and expedite approvals for infill housing.
• Encourage medium-density projects by offering specific incentives to two- to three-story walk-ups close to nodes to expand the rental supply rapidly.
• Repurpose underutilised commercial areas by constructing transitional housing and, when appropriate, converting workplaces to residences.
• Encourage build-to-rent and purpose-built student housing, as these markets can ease the strain on the supply of private rental properties.

2. Assist tenants directly

• Targeted short-term rent relief or bond support for households that are at risk.
• Increase the number of community housing and social projects financed by public-private partnerships.

3. Stabilise the market through more intelligent regulation.

• The tenancy modifications in WA are an excellent illustration of balanced reforms; they prioritise stability above harsh measures that would deter investment.
• Increase the pace of dispute resolution by finding more efficient substitutes for drawn-out judicial proceedings that lower risk and conflict.

4. Data transparency and demand management

• Improved data sharing: developers, councils, and local agents can coordinate supply using clear, current vacancy/rental dashboards.
• Promote longer leases: tax breaks or other incentives for longer-term landlords may lower turnover and increase stability.

Many of these solutions take time to implement and call for cooperation from the commercial sector and the government. However, within 12 to 24 months, small victories (such as approving specific medium-density projects close to transportation) can make a noticeable difference.

What Bargoti Real Estate should do in 2025 — strategic playbook

Bargoti Real Estate is situated at the nexus of the local Perth market, landlords, and tenants. This is a doable, prioritised road map that will safeguard client revenue, attract listings, and enhance the local rental market.

1. Short-term (0–3 months): Maintain occupancy and revenue

• Set reasonable rents that will immediately draw in quality tenants by using current vacancy banding and nearby comparables. Don’t overcharge.
• Provide a “renewal package” that includes flexible minor-mod policy, quick maintenance, and tiny rent incentives for lengthier renewals (subject to owner permission).
• Make sure that every property manager receives training on the tenancy reforms in WA. Update client-facing manuals, leasing terms, and listing templates.
• Provide landlords with a monthly report on comparable lets and local vacancy patterns, demonstrating how proactive management minimises downtime.

2. Medium-term (3–12 months): Increase portfolio resilience and investor confidence

• To encourage owners to accept lower but more consistent profits, present a “stability-first” package that includes longer leases, tenant screening, dependable maintenance budgets, and transparent reporting.
• Create a pet-acceptance program with deposit and inspection procedures to safeguard landlords and increase the number of potential tenants, considering tenant demand and the legal inclination to permit dogs.
• Link local investors with pooled investment opportunities or institutional BTR participants.
• To reduce conflict and boost satisfaction, implement or update CRM/tenant portals for communication, payments, and maintenance.

3. Long-term (12–36 months): Influence on the community and market leadership

• Encourage and take part in affordable housing initiatives or medium-density experimental projects.  
• Bargoti can assume a stewardship role by overseeing units, reporting impact, and guaranteeing high-quality tenancy outcomes.
• Publish guidelines regarding rights and expectations for renters, and host webinars for landlords on the new tenancy rules, tax implications, and best practices.
• An excellent ESG selling point for investors is retrofit packages, or energy efficiency improvements, that improve the property’s appearance and lower operating expenses for tenants.

Investor guidance — how to advise owners in 2025

1. Existing owners and buyers should think about:

• Yield vs. risk: concentrate on long-term yield and tenant quality; acknowledge that capital gain narratives are still relevant in Perth but that rental growth may decelerate.
• When advising leveraged owners, conduct debt stress testing by generating conservative interest-rate scenarios.
• Diversify your site by looking at growth corridors outside of the busiest areas, where vacancy risk is reduced and returns and value growth may be more alluring.
• Value-added tactics: minor improvements (kitchen, bathroom, energy efficiency) raise rental prices and lower vacancy rates.

2. For fresh investors:

• Avoid pursuing the most expensive suburbs mindlessly.  
• Look for buildings that consistently attract tenants (close to transportation, education, and health).  
• In ROI modelling, take WA tenancy changes into account.

3. Tenant advice — what tenants should do right now

• Get your documents ready, including your ID, references, pay slips, and application materials.
• The market is still competitive in many areas.
• Be realistic while creating your budget; even if growth slows, expect rents to stay high.
• Make wise concessions during negotiations by requesting lengthier leases (some landlords would accept steady income), acceptable maintenance requirements, and pet agreements.
• Be aware of the new tenancy laws in WA, which prohibit rent-bidding, limit the frequency of rent increases, and establish a dispute commissioner.

Scenario planning: 3 possible Perth rental pathways for 2025

The brief scenarios with probable results and suggested Bargoti responses are shown below.

1. Scenario A: Gradual easing (basic case; probably)

• Perth’s vacancy rate is gradually declining to 2.8% to 3.5%, while the rent increase is moderate at 2% to 4%.
• Bargoti’s actions include concentrating on portfolio advisory services, realistic pricing, and retention.

2. Scenario B: Rapid (optimistic) balancing

• Faster completions, a shift in investor and tenant behaviour, vacancy rates of more than 3.5% in numerous suburbs, and flat or slightly lower rents in specific microlocations.
• Bargoti’s initiatives include providing medium-term hold plans to landlords, encouraging little modifications to maintain yields, and aggressively marketing to tenants to ensure quality.  
• By promoting quicker letting times, take advantage of this chance to grow your managed portfolio.

3. Scenario C: Pessimistic renewed pressure

• Demand is raised once more by a population boom, resource sector expansion, or policy shock; vacancy rates decline and rents start to climb sharply again.
• Actions taken by Bargoti: Give portfolio management for high-performing suburbs top priority, counsel cautious owners, and maintain stringent screening to safeguard tenants and lower the chance of eviction.

Answers to likely landlord and landlord-client questions (FAQ-style)

1. Will rents fall in Perth in 2025?

Broadly, rents are expected to moderate (grow more slowly); outright falls across the metro are unlikely in 2025 except in limited micro-markets with oversupply. Forecasts point to mid-single-digit growth nationally and moderation in Perth — not a collapse.

2. Do new tenancy laws make renting worse for landlords?

The laws aim to balance rights — landlords lose some manoeuvrability (e.g., rent bidding banned, less frequent rent increases) but gain faster dispute resolution and clearer frameworks. Proactive management can protect yields while complying with reforms.

3. Should I sell if my mortgage is highly geared?

That’s an individual financial decision. Evaluate under stress-test scenarios (higher interest rates and reduced rent growth). Bargoti’s advisory can run cash-flow models and tax considerations — often minor strategic changes (longer tenancies, modest rent adjustments, cost control) can stabilise returns.

Final takeaways — what “easing” really means for Perth in 2025

1. March 2025’s rise in vacancy to ~2.5% is promising but not a market reset. Expect improved balance in some suburbs, persistent stress in others.

2. WA tenancy reforms reshape pricing, advertising and tenant selection practices. Adaptation pays.

3. Provide investor education, tenant retention strategies, and data-led management — these will be differentiators.

4. Supply responses, targeted government programs, and faster approvals are necessary for medium-term relief.

Bottom line: Perth’s 2025 rental market is moving toward moderation rather than collapse. For property managers and landlords — especially firms like Bargoti Real Estate — 2025 is a year to pivot from firefighting (short-term vacancy scrambles) to strategy: retain good tenants, price smart, adopt compliant processes, and engage in community and developer partnerships. Those who do will safeguard rental income and build stronger, longer-term client relationships.

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