Perth’s rental market has been under pressure for an extended period. When rent rises, vacancy stays tight, and rental supply struggles to keep up, some investors start looking beyond established homes and thinking about building new homes instead.
Recent market commentary from REIWA’s rental vacancy data and its Perth market updates shows how tight Perth’s rental conditions have been, while broader housing research from the National Housing Supply and Affordability Council and the ABS consumer price index release confirms that Perth has been among the stronger rental growth markets nationally.
Market conditions are pushing more investors to look at new housing supply rather than existing more seriously.
What is happening in Perth’s rental market?
It’s basic supply and demand. Perth’s rental market has experienced a long period of low vacancy and rising rents, which naturally puts more attention on rental stock. When rental supply is constrained, existing properties become more competitive, but so do opportunities to add new homes into the market.
Rental pressure matters beyond tenants. It influences investor behaviour. If the rental market is strong and vacancy is tight, investors may start asking whether building a new home in the right area could be a more strategic move than competing for older established homes.
Why would an investor build instead of buy established?
For some investors, building becomes attractive when the market is short on rental supply because it offers the chance to add something newer and more aligned with what current renters want.
It is also about control. Building gives the investor more say over the result than buying an older home that may already come with limitations.
Instead of buying an older property and then upgrading it, building allows the investor to start with:
- a new dwelling
- a more modern layout with the potential to maximize living and bedroom space
- lower early maintenance risk
- better energy efficiency
- a house that aligns better with the tenant’s expectations
Where are investors likely to look if they build?
Investors are more likely to be looking where land is still being released and communities are still expanding. In Perth, right now that means the northern and southern growth corridors, along with selected outer areas where land supply and infrastructure are still moving forward. It’s because that is where land supply, newer estates, and future housing stock are still being created.
Areas such as Yanchep, Alkimos, Eglinton, Karnup, Bullsbrook, and parts of the south-east continue to draw attention because they offer the land component that established suburbs often cannot.
Government investment is also part of the story. The WA State Budget housing overview highlights major investment in enabling infrastructure to unlock more residential land. For investors, this matters because new rental opportunities are more likely to come from the same places where new housing supply is being enabled.
Conclusion
The rising rental market in Perth not only affects tenants, but also changes how some investors think about supply, stock quality, and a long term rental strategy. At IQ Construction, we have helped investors build properties suited to today’s market, and can help do the same for you! From assessing the block and build approach through to delivering a home that works as a long-term rental asset, we can do it all.
Contact us today for more information – (08) 9399 6715.