If you’ve been watching the market lately and feeling a little unsure, you’re not alone. There’s a lot of noise out there right now, proposed tax changes, shifting investor sentiment, plenty of headlines. So let’s cut through it together and look at what the numbers are actually telling us.
The vacancy story hasn’t changed
Nationally, the vacancy rate is sitting at just 1.2%. Here in Perth, we’re averaging around 2.2%. To put that in perspective, a balanced rental market is generally considered to sit at around 3%. So while Perth has eased slightly from the extreme lows we saw a couple of years ago, we are still firmly in undersupplied territory.
That means rental demand remains strong, quality tenants are still competing for well-presented properties, and landlords are still in a solid position.
So why does confidence feel shaky?
The short answer: uncertainty. Investors have had a lot thrown at them recently – proposed changes to capital gains tax, ongoing debate around negative gearing, and now discussion about restricting SMSF borrowing for residential property. When the rules of the game feel like they might change, it’s completely natural for people to pause and wait for clarity.
And that’s exactly what we’re seeing. Some investors are sitting on their hands. Not because the fundamentals have changed, but because the policy picture hasn’t settled yet.
Here’s the thing: none of this changes the fundamentals
Whatever happens with those proposed changes, they don’t alter the two forces that actually drive our market:
We still have a supply shortage. New dwelling construction has not kept pace with demand, and that gap doesn’t close overnight.
Population growth continues. Western Australia keeps attracting people, for jobs, lifestyle, and affordability relative to the East Coast, and every one of those new arrivals needs somewhere to live.
There’s also a quieter trend working underneath all of this: average household sizes have gradually declined over time. More people living alone or in smaller households means we need more dwellings to house the same number of people. It’s a structural shift, and it only adds to demand.
My personal take
In my view, what we’re experiencing right now is a temporary lull. Investors have pulled back while they wait to see how the proposed changes land, and honestly, that’s a reasonable response to uncertainty.
But once clarity is provided around those changes, I expect investor activity to spike again. The fundamentals, tight vacancy, ongoing population growth, constrained supply, shrinking household sizes, all point the same direction. Markets don’t stay hesitant forever when the underlying demand is this strong.
What this means for you
If you’re an investor (or thinking about becoming one), periods like this often present strong opportunity. Less competition, more time to do your due diligence, and a market where the long-term drivers remain firmly intact.
That said, the right strategy will always depend on your individual goals, your budget, and your risk profile. There’s no one-size-fits-all answer and anyone who tells you otherwise isn’t giving you advice worth taking.
If you’d like to talk through what the current market means for your property, or a property you’re considering, I’d love to have that conversation. No pressure, no jargon, just a straight answer about where things sit.
*Ali Ringuet is the Business Development Manager at Orana Property Group. This article is general information only and does not constitute financial or tax advice. Always seek advice tailored to your personal circumstances.
