Perth Rental Market Insights

Because of the significantly higher returns for properties rented out on a short-term basis, many investors in Australia prefer to put their properties on OTAs like Airbnb rather than renting them out on longer leases.

Still, you should remember that choosing the right location for Airbnb investment and keeping up with the local market trends is essential for your success. So, in this article, we’ll share some insights into the Perth rental market, which continues to impress us with steady growth and high demand for rental properties.

You may also want to check out our article, which shares essential information about the new Airbnb rules in Australia that govern the use of residential properties for short-term stays.

Perth Rental Market: Key Facts about Short-Stay Rentals

Perth is the capital and the largest city of Western Australia. Nestled on the banks of the scenic Swan River, this dynamic city blends urban cool with raw natural beauty. It attracts a lot of local and international travelers seeking relaxation and adventures. Thanks to its high occupancy rate and relatively low home values, Perth is one of Australia’s top Airbnb markets to invest in.

Since running an Airbnb requires effective management, a smart decision is to opt for vacation rental software like Hospitable to automate routine tasks and improve operational efficiency. This will give you a competitive advantage and set your STR business for long-term success.

According to the data from Airbtics, from July 2023 to May 2024, there have been 5,383 active Airbnb listings in Perth available for bookings for more than 90 days, showcasing an increase of 20.26 % compared to the previous year.

The data also reveal that individual Airbnb hosts dominate the Perth short-term rental market. 94.6 % of Airbnb hosts in Perth manage 1-5 listings, 4.24 % of hosts list 6-20 properties, and only 1.17 % of hosts have more than 20 listings.

The average occupancy rate for STR properties in the city is 85% throughout the year, which is the highest in the country, and the average daily rate (ADR) is $ 113. A typical host income (annual revenue) in Perth is $35,938.

Perth Short-Term Rental Market Performance in 2022-2024

Understanding market dynamics is crucial for strategic decision-making when navigating a competitive short-term rental landscape. So, let’s look at the key metrics that show how the Perth STR market was performing in 2022, 2023, and the first five months of 2024. 

Average occupancy rate

Perth enjoys a Mediterranean climate and is considered the sunniest capital city in Australia, making it a year-round pleasure to visit. Vacation rentals in Perth have the highest demand in the summer months (December, January, and February) when the occupancy rates are the highest. Things slightly slow down in the winter months, which is expected, considering the beach-related attractions and activities offered by the city.

The average Airbnb occupancy rate in Perth remains rather stable. Comparing 2024 to 2023 and 2022, we see only marginal differences in occupancy rates—an increase of 1.19 % over two years.

Average daily rate (ADR)

Perth had higher average daily rates in 2023 than in 2022, but from January to April 2024, the rates were lower than in 2023. Yet, in May 2024, the daily rate was higher ($114) compared to May 2023 ($110). In general, ADRs in Perth have increased by 14.14 % over two years. 

Revenue

The 2023 monthly revenue was higher each month than that of Airbnb hosts in Perth in 2022, except in May, September, October, and December 2023, when the revenue was lower.

From January to April 2024, hosts earned less each month than during the same month in 2023. But in May 2024, monthly revenue ($3,078) was significantly higher than monthly revenue in May 2023 ($2,540) and in May 2022 ($2,736). In general, the Perth STR market saw an increase of 11.05 % in annual revenue over two years.

Perth Rental Crisis

Australia’s housing crisis is probably most acute in Western Australia, particularly in Perth, which had unique factors that contributed to the rental crisis—lack of supply and demographic trends.

Perth is experiencing a strong population growth driven by significant overseas and interstate migration. Yet housing construction is at decade-low levels, so Perth has a huge housing supply shortage.

Due to high demand for rental properties and limited supply, residential vacancy rates in the WA capital remain near historical lows. In July 2024, Perth had a rental vacancy rate of just 0.8%. (Source: SQM Research).

In fact, for the last five years, the rental vacancy in Perth has been below 3%. This rate is generally regarded as a “healthy” vacancy rate because tenants have a decent housing choice, and landlords are still guaranteed a good ROI.

In 2023, Perth had the biggest increase in rental prices—house rents have grown 17%, and units have risen by 18%, reaching record levels. As of March 2024, Perth had the highest quarterly increase in median weekly advertised rents, rising 5.8%, to take rents 15.5% higher over the year. (Source: realestate.com.au)

These numbers show that Perth is an extremely tough market to rent in. Still, the latest data from the Real Estate Institute of Western Australia (REIWA) show that Perth’s rental market has remained stable since March 2024, and median rents have not changed.

Median weekly house and dwelling rents held steady at $650, and unit rents at $600, and the number of rental listings continues to rise. These numbers are encouraging as they show that the Perth rental market is slowly changing and showing signs of stabilization after significant rent increases in recent years.

This change can be attributed to several factors, including self-moderation of demand for long-term rental properties and an increase in new supply in some areas. But while these trends are promising, the challenges remain as Perth is the fastest-growing capital city in Australia, and housing shortages persist.