Domain data shows Perth rents at new record prices as housing market vacancies tighten

Perth rents have rebounded sharply to jump to new records, as pressure continues across the nation’s housing market.

Nationally, vacancy rates for rental housing fell to a record low of 0.7 per cent in the March quarter, according to new data from Domain.

While some tightening was expected in the traditionally busy start-of-the year period, Domain said the scale of the decline highlights just how constrained housing supply remains.

Its chief residential economist Nicola Powell said the results showed renters could no longer absorb higher rents, despite the quarter typically delivering strong rental growth.

“Three months ago, we warned that renters were running out of capacity to absorb higher rents,” Dr Powell said.

“Even during the usually stronger March quarter, this month’s data shows that affordability ceiling has now been reached.

“Vacancy rates are lower than ever and supply remains incredibly tight, but rent growth is no longer accelerating everywhere. That tells us households simply can’t stretch any further.

“In many cities, we’re seeing rents hold flat or rise unevenly despite worsening shortages. Affordability, not demand, is now the key constraint.”

Domain’s latest report, released on Thursday, shows the focus of the national conversation has shifted from how tight the rental market is to how much more renters can realistically pay.

“Rental conditions still favour landlords due to the lack of supply, but the pace of growth is not being sustained at high levels,” Dr Powell said. “This isn’t because conditions have eased, but because renters have hit their limits.”

Perth was the stand-out across the country. The city experienced the nation’s largest quarterly lift in median rents, jumping 5.7 per cent or $40 over the March quarter to a record $740 per week. This followed two quarters of stability.

The quarterly lift was also the strongest since December 2022.

The western suburbs featured heavily in the top 10 most expensive suburbs for median weekly asking rents in the quarter report. Dalkeith and Swanbourne had a median rent of $1500, City Beach reached $1400/week and Mt Claremont was $1300/week. Median weekly rents in Nedlands, Floreat and Cottesloe were $1150-$1250.

North Fremantle, Cottesloe, Claremont, Perth and Subiaco topped the list of top 10 suburbs with the highest weekly asking rent for units, with prices ranging from $750 per week in Subiaco to $885 in North Fremantle. Notably, North Fremantle’s median rent was the State’s most improved, having seen a 0.6 per cent drop in prices over the quarter.

Shenton Park, Mt Hawthorn, Leederville and Woodlands have seen some of the largest annual growth rates in the median rental price for houses to the March quarter. Highgate, Glendalough, West Leederville and Nedlands were in the top 10 for units.

Domain said Perth’s annual rental growth points to a re-acceleration in momentum following a period of stability, although the pace remains below the double-digit peaks previously seen.

Perth unit rents rose 5.3 per cent — or $35 a week — over the quarter to reach a record average $695 per week.

This marked the strongest quarterly gain of any capital city and the largest increase in two years.

Perth’s vacancy rate tightened to a record low of 0.3 per cent in March, down from 0.5 per cent in December, reinforcing extremely constrained supply and the sharp rebound in rents.

Affordability is now the key constraint

Brisbane continued to record steady gains, with momentum consistent across the unit market but moderating for houses.

Sydney held its peak levels amid extremely tight supply, Adelaide recorded uneven growth and seasonal spikes, while Melbourne was still working through a recovery phase.

“Affordability is now the key constraint, limiting how far and how fast rents can rise — even in the tightest markets,” Dr Powell said.

“This reinforces the shift in the cycle, where tight supply is no longer sufficient to drive faster rental growth.

“Markets such as Perth, Adelaide and Hobart remain extremely constrained, while previously softer markets like Melbourne and Canberra are tightening again. This confirms demand remains strong and supply insufficient — but the price is becoming more uneven and less responsive.”

Domain said the conditions marked a defining shift in Australia’s rental market.

Renters were seeking cheaper locations and house-sharing, becoming more price sensitive, slower to commit and more willing to walk way when rents outpace their incomes, even in tight markets.

“Supply remains severely constrained and competition remains fierce, but tight conditions alone are no longer enough to push rents higher across the board,” Dr Powell said.

“Instead, the market has entered a new phase - one where renters’ budgets, not just the lack of available homes, are determining outcomes and increasingly shaping major life decisions, particularly for younger Australians deciding when to move out of home and where they can afford to live.”