Perth rental market broken but there are positives for housing supply

“But the national vacancy rate is around 1.7 per cent compared to the vacancy rate in Perth which sits at around 1.2 per cent.

He added that Perth unit prices have been consistently rising faster than houses since 2024.

However, only 17 per cent of commencements in Perth are in the high density sector which is among the lowest rates in the nation.

“Perth has had a solid and consistent outperformance against the national average since 2022, he said.

“But Perth is also showing a loss of momentum in growth rate since November.”

Lawless said housing values across Perth and other mid-sized capitals have pulled away over the past five years.

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“However, there are still a lot more places that are more unaffordable than Perth,” he said.

Lawless said the lower quartile of the market is consistently showing a stronger growth trend due to stiff competition from first home buyers, investors and mainstream demand.

He added that the stronger regional markets tend to have a combination of liveability and affordability.

“We are also seeing many of the traditional mining areas like Karratha and Kalgoorlie seeing an upward swing,” he said.

“Investor demand remains strong and is overtaking subsequent buyers as the largest portion of housing demand.

“First home buyer activity has diminished to be roughly in line with the national average.”

Lawless also believes another rate hike is on the cards and expects it to come around August.