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It’s not just homes for sale that are hard to find. Domain data for June showed the average rent in Perth was $650 per week, with a vacancy rate of $1. It is still a landlords’ market, with the interest rate at 0.6%, although this is down slightly from 0.4%.
The latest Rental Misery Index data for July 2024 shows a slight decrease in extreme rental stress in WA, with the proportion of renters falling from 83.7 per cent to 82.7 per cent.
Suburbtrends founder Kent Lardner said Middle Swan and Herne Hill had the worst rental conditions.
“The situation is very serious,” he said.
“Rents are expected to rise further and affordability will decline.”
Mr Ladner said recommendations included speeding up the construction of affordable rental properties; implementing policies that support renters but don’t alienate investors; and tying population growth to housing policy to avoid the recent disconnect that was a major cause of the current situation.
A spokesman said the state government was acutely aware of the housing pressures facing across the country and had implemented a range of initiatives to deliver more homes.
“In the second half of 2023, housing construction completions exceeded starts for the first time since June 2020,” he said.
“This trend has continued, meaning more homes are now being completed than started, which will help ease construction delays.”
Ray White Group head of research Vanessa Rader said new construction in the west was being held back by construction costs and a lack of top builders.
“There have been some improvements in planning now where you can bypass local government completely and apply directly to the state government,” she said.
“So planning isn’t a big issue now and building costs seem to be stabilising, but there is still the issue of a number of major builders failing, so who do you actually talk to if you want to develop a property?”
HIA executive director Michael McGowan said about 16,000 homes were being completed each year, up from 10,000 before the pandemic, but 9,000 homes short of the level needed to ease current housing challenges.
“Right now, the detached housing market needs more labour,” he said.
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“The number of apprentices currently being trained is high and this needs to be maintained and supplemented in the short term with a targeted supply of skilled migrants with appropriate industry qualifications.
“To close the gap, we also need investment in infrastructure, land and research and development that supports new building methods.”
Mr McGowan said the high-end apartment market continued to grow, but there was still a shortage of builders willing to build affordable housing due to rising construction costs, design complexity and risk.
Oxford Economics senior economist Maree Kilroy said Perth’s property market was hot, with Western Australia bucking the national trend with lending up 4 per cent month-on-month, according to the latest lending indicators released by the Australian Bureau of Statistics.
“Interest rate cuts from early 2025, combined with a continued housing shortage, will trigger an acceleration in price growth thereafter,” she said. “However, housing affordability will limit gains.”
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