Login
iscover
Investors are set to flock back to Western Australia, driven by high rents and strong growth potential, as undersupply and robust demand create opportunities for property managers to boost their rent rolls.
Cotality’s latest Chart Pack data showed that nationwide, rents rose 43.9 per cent over the five years to September 2025, compared with a 17.5 per cent rise in wages over the same period.
Across the country, Western Australia’s rents grew the most, up 66 per cent over the past five years amid tight supply and high demand.
The Real Estate Institute of Western Australia (REIWA) said median dwelling rent in the state rose to $720 per week in January, 2.9 per cent higher than December 2025 and 7.5 per cent higher than the same time in 2025.
According to Cotality’s data, gross rental yields in January 2026 fell below average, at 3.8 per cent in Perth, while regional Western Australia showed higher yields at 5.4 per cent.
InvestorKit founder Arjun Paliwal said yields would continue to decline, but investors shouldn’t feel intimidated, as the decline was positive.
He said that rental growth on the Perth market remained strong, but dwelling prices were rising faster.
“People look at that and go, oh, yields are coming down in Perth, it's not so good, it's not a great investment,’ Paliwal told REB.
“Investors need to be mindful that they don't look into falling yields and think they’re worse off in a market like that. It actually just means more growth is occurring, but rents are still growing strong too.”
The data followed rapidly declining listings across the city, with the number of properties for sale falling to around 1,500, and the average time on market being eight or nine days.
As a result of increased owner-occupier demand, particularly for first home buyers, the state has seen fewer rentals on the market than in previous years.
REIWA data showed that there were 2,087 properties available for rent at the end of January, 21.6 per cent higher than December but 3.2 per cent lower than the same time in 2025.
According to WHITEARCH director and licensee Ashby Farrell, the investors’ exodus had been impacting property managers in Perth over the past couple of years.
He said that while rents had risen, allowing property managers to earn more, business was declining because many properties were going to owner-occupiers rather than investors.
“There are less investors available in Perth, so to get properties to manage is much harder than it has been in the past.”
“We might sell one of our rentals, and then a first-time buyer is coming along and using the scheme and buying that and then moving in. So we're losing the rental.”
With investors returning to the market, property managers should see an opportunity to grow their rent rolls once again.
Paliwal said that smart investors should still consider Western Australia, as the premium market in the $1.5-2.5 bracket is positioned for growth from 2026 onward.
He said that the Perth premium market presented more opportunities than the affordable areas because of the significant growth in the middle and outer rings.
He added that there were also strong prospects in the city more broadly, as long as the undersupply persisted, driving rents and prices to rise.
Cotality’s data also showed that, nationally, yields were 3.6 per cent – the lowest they’d been since September 2022.
The company said that although yields were holding well below the long-run average, investor demand hadn’t been significantly affected.
“Investor lending comprised 41 per cent of total lending by volume in the September quarter, well above the decade average of 33 per cent,” it said.
REIWA president Suzanne Brown said that while it was common to see strong rent rises in January, the increase was driven by price rises in more expensive suburbs and by families securing rentals ahead of the new year.
She said that 8.4 per cent of rental stock had been removed from the market following a mass exodus of investors during COVID-19, causing the vacancy rate to drop to record lows and rental prices to soar.
“The rental market has shown some improvement over the past 18 months, which has been mainly due to an increase in supply; however, we are not out of the woods.”
“Population growth remains high, and we have constrained conditions in both the new homes market and the established homes market. These factors are maintaining strong demand for rental property,” she concluded.
ABOUT THE AUTHOR
You are not authorised to post comments.
Comments will undergo moderation before they get published.