Calls for rent cap to stop WA's spiralling rental market

Rent increases would be capped annually across Western Australia under a new plan pushed by housing advocacy groups.

The "Cap Still Fits" report, released today by the Make Renting Fair Alliance, argued Perth tenants could save almost $33,000 over the next five years with a 2 per cent cap on rental increases this year.

Regional renters could save about $30,000 based on an average rent of $710 a week, according to the report.

Tenants in metropolitan suburbs Churchlands, Scarborough and Fremantle could save the most, with renters in regional locations like Karratha, Exmouth and Port Hedland tipped to save up to $58,812 over five years.

Alliance spokesperson Kate Miller said stabilisation of the rental market was long overdue.

"Rent shouldn't be a free-for-all where renters are expected to cough up infinitely," she said.

"We need a system that gives renters and landlords certainty and stops housing costs from spiralling further."

Financial counsellor's 'rental nightmare'

It is a situation Broome financial counsellor Veronica Johnson is all too familiar with, for both professional and personal reasons.

Working regularly across the Kimberley to help the region's vulnerable residents with monetary problems, she was recently "looking down the barrel" of homelessness herself after her lease ended.

Ms Johnson had rented a unit in the town, about 2,000 kilometres north of Perth, since 2021, with rent jumping from $480 to $740 a week over that period.

The only suitable option was an almost identical unit in the same complex, but on a different floor, at $1,000 a week.

"We're looking at exactly the same unit in the same complex," she said.

"That's over a 100 per cent increase and I can't imagine any mortgages would be that much.

"People are shocked to find someone that is actually representing people and assisting people can no longer actually be able to afford to live here."

Ms Johnson was only able to afford the rent after her employer chipped in to help.

Cap would be 'life-changing'

After more than a decade of consideration, the WA government introduced a swathe of rental reforms in 2023, including restricting landlords to one rent increase a year.

But it stopped short of rental caps or freezes, arguing substantive change could have unintended consequences on the rental market.

But renter advocacy group Everybody's Home argued increases as low as $20 a week were increasingly unaffordable for the average tenant.

Spokesperson Maiy Azize said a separate survey of 1,100 renters, home owners and people in temporary housing found rising costs had tenants at their absolute limit.

"Even these amounts that can seem small really add up (after) years of relentless rent increases," she said.

"Fuel costs have really gone up in the last couple of years, the cost of food has gone up … [and] electricity bills."

Ms Azize said tenants were too afraid to report maintenance issues, fearing it could result in higher rent orleases not being extended.

Critics warn of unintended consequences

Real Estate Institute of WA president Rob Mandanici said caps offer short-term protection for current renters at the expense of those looking for somewhere to rent.

"Rent caps might sound appealing, but they come at a significant cost to the broader rental market," he said.

"A cap may benefit existing tenants, but it does nothing to address the underlying shortage of rental homes.

"Instead, it risks discouraging investment, driving rental property owners out of the market and making an already difficult situation worse."

"Property owners face rising costs, including insurance, rates, maintenance and interest. Capping rental income while those costs continue to increase makes providing rental housing less attractive."

Commerce Minister Tony Buti said the state government had taken a number of steps to protect renters, but rent capping was not under consideration.

"This is due to concerns such measures could discourage investment in rental housing, and reduce the supply of available properties," he said.

"These impacts on the housing market may ultimately worsen affordability and limit choice for tenants."

Dr Buti said legislation enabling the second stage of the government's rental reforms, including a ban on no-grounds evictions and establishing minimum standards for rental properties, would be introduced to parliament this year.

Ms Johnson ultimately wants greater protection for tenants, including a rent cap and a proposal to see critical workers such as community financial counsellors included in government-subsidised housing.

"I came from interstate to help the community, and the government needs to review what's going on for workers that come in with skills," she said.

"Not just financial counsellors, aged care workers (and) any other workers that are critical to the community's needs."