Western Australia overhauls rental laws as industry warns of supply shock

Western Australia’s rental market is set for a significant regulatory shift, with the State Government announcing a suite of reforms aimed at strengthening tenant protections headlined by a proposed ban on no-grounds evictions.

The reforms, unveiled by the Cook Government on Monday (4 May), form part of the next stage of the Residential Tenancies Act review and are being positioned as a response to ongoing rental stress and affordability pressures across the state.

At the centre of the changes is the removal of ‘no-grounds’ terminations, which currently allow landlords to end a tenancy at the conclusion of a fixed-term lease without providing a specific reason.

Under the proposed reforms, landlords would instead be required to provide a valid, prescribed reason to terminate a lease, aligning Western Australia more closely with tenancy frameworks in other jurisdictions.

The Government has framed the changes as a move towards greater housing security for tenants, alongside broader measures that include rent relief mechanisms and the introduction of minimum standards for rental properties.

The announcement has drawn a sharp response from the investor and property management sector, with concerns the reforms could have unintended consequences for rental supply and affordability.

The Real Estate Institute of Western Australia (REIWA) has warned that removing no-grounds terminations risks exacerbating an already constrained rental market, particularly at a time when investor sentiment is under pressure.

REIWA President Suzanne Brown said the policy could accelerate the loss of rental stock, noting the market had not fully recovered from the investor exodus seen following the pandemic.

“WA cannot afford to lose any more rental properties,” Ms Brown said.

“Another drop in supply will see the vacancy rate fall, competition increase, and even more upward pressure on rent prices.”

Perth, regional rents could rise

Industry feedback suggests some investors are already reassessing their positions, with reports of increased property sales and appraisal activity following the announcement.

This comes against a broader backdrop of policy uncertainty, including proposed federal changes to capital gains tax and negative gearing, which are also weighing on investor confidence.

Beyond supply concerns, the removal of no-grounds terminations is expected to materially change how tenancy issues are managed.

Currently, landlords often opt not to renew a lease at its conclusion rather than pursue formal breach proceedings, a process that can be costly, time-consuming and potentially damaging to a tenant’s rental history.

Under the proposed framework, property owners may be forced to rely more heavily on breach notices and tribunal processes to resolve disputes or remove problematic tenants.

REIWA argues this could lead to an increase in court activity, higher management costs and more complex tenancy administration. These costs are ultimately likely to be passed through to tenants in the form of higher rents.

Supply issues restricting rental market

The changes may also influence tenant selection practices. With fewer options available to manage risk, property managers and landlords could adopt more stringent screening processes, potentially making it harder for applicants with limited or imperfect rental histories to secure accommodation.

Despite these concerns, the reforms are not without industry support. REIWA has indicated it broadly supports the introduction of minimum property standards and greater clarity around the information that can be requested from tenants and must be disclosed by landlords.

The key point of contention remains the balance between tenant protections and maintaining a functional, adequately supplied rental market.

Western Australia’s vacancy rate has remained tight in recent years, and while conditions have stabilised from extreme lows, the market remains sensitive to shifts in supply.

In this context, even marginal changes in investor behaviour can have outsized effects on availability and pricing.

The Government has signalled that consultation will continue as part of the legislative process, with industry groups expected to play a central role in shaping the final form of the reforms.

For investors, the announcement reinforces the importance of closely monitoring regulatory risk alongside traditional market fundamentals.

While stronger tenant protections may improve housing stability outcomes, the investment equation is becoming more complex, with policy settings increasingly influencing both risk and return.

As the reforms progress, the key question will be whether the changes strike a sustainable balance or whether, as some in the industry fear, they unintentionally tighten the market they aim to support.