As seen in The West Real Estate
After several years of crisis conditions, the rental market has shown some improvement in the past 18 months. Although active listings for lease remain low, they have been fairly stable month to month. Yes, rent prices are at record highs, but the rate of rent price growth has slowed significantly over the last two years. The vacancy rate was over 2 per cent for all of 2025, up from the record low of 0.4 per cent recorded in March 2024.
This is positive news, but 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.
We cannot afford to be complacent about actions that might affect the delicate state of the rental market.
We are again hearing strong calls to remove no grounds terminations, with claims it will improve conditions for tenants.
While many other states have banned no grounds terminations in recent years, it is interesting to look at the experience in New Zealand.
No grounds terminations were banned in 2020. That ban was repealed in 2025.
NZ Minister of Housing Chris Bishop said the previous government waged a war on landlords, causing many landlords to exit the rental market altogether and causing worse outcomes for tenants – rents up by $170 per week since 2017, the social housing waitlist increasing by about 20,000 families and thousands of families living in emergency housing motels.
We should also look to Victoria, where the number of rental properties declined 3.2 per cent from the September 2023 quarter to the June 2025 quarter – according to Homes Victoria Rental Report data – following the introduction of strict tenancy legislation.
In REIWA’s frequent discussions about no grounds terminations, many people have stated this change won’t make investors sell their properties. My response is: what if you’re wrong? Is that a risk you’re willing to take?
WA’s rental market has already experienced the effects of an exodus of investors. REIWA’s modelling estimates nearly 20,000 properties – or 8.4 per cent of stock – were removed from the rental market following the end of the COVID rental moratoriums. As a result, the vacancy rate plummeted and rent prices soared.
We know investors are sensitive to legislative change. 74 per cent of respondents to a 2025 REIWA Housing Issues survey said changes to legislation would influence their decision to sell their investment property. 62 per cent of potential investors said it would deter them from investing in residential property.
WA can’t afford to lose any rental properties. Removing no grounds terminations risks a return to the crisis conditions we experienced only a couple of years ago.
