Not so long ago real estate agents were reporting queues of prospective tenants at home opens and people offering above the advertised rental price in an attempt to get a lease in an over heated market where demand was outstripping supply.

And earlier this month, Australian Property Monitors released figures showing Perth was just shy of topping Sydney as the most expensive place to rent in the country.

The data revealed that Sydney's median price tipped $500 a week, while Perth's was just $10 behind.

But has Perth's rental bubble burst?

Tim Nickoll spends his days immersed in the Perth rental market.

As a property manager for Harcourts Realty, his catchment area primarily covers the inner city precinct.

He says activity in his rental portfolio has dropped about 20 per cent.

"I am finding the vacancy rates for properties are sitting longer," Mr Nickoll said.

"These days, I can have an inner city property that can lie vacant for three to four weeks.

"The honeymoon period where people would turn up to home opens and there would be queues out the door have stopped now.

"Sometimes I can have one or two people coming through a property that I have open, or in the worst case scenario sometimes [none] at all."

He says rental enquiries, which often act as the litmus test for the market, have also dropped.

"About six months ago I could have been inundated with phone calls as soon as I listed a property," he said.

"Now, I might get 10 emails in a week before I do a home open."

He says the precincts hit most by the rental downturn are inner city suburbs and he believes the decline is linked to a fall in business activity.

Break lease

Residential tenants, who have lost their jobs because of a slowdown in business mining investment, are struggling to maintain paying their high rents.

Most signed long leases during the boom which locked them into a set term contract at the higher prices.

Now they are experiencing tougher financial conditions and it is prompting them to break their leases.

The head of the Real Estate Institute of WA, David Airey, said the number of break-lease tenants was nearing one-in-four, up from one-in-eight last year.

He said it was putting more pressure on the rental market.

"There are around 4,200 vacant rental properties on the Perth market, which represents a vacancy factor of 3.3 per cent," he said.

"When you compare in December last year when we had just around 2100 properties and a vacancy factor just fewer than two per cent."

He attributed the fluctuations to changes in people's employment.

"People generally move where there is employment and where there is no employment for them and then they will need to get out of a rental contract," he said.

But he's warned of the financial ramifications of ending a lease.

"A rental contract is like a mortgage on a house in the way it is a contract to pay money every week for the term of the agreement," he said.

"You can't just break it and walk away.

"You have to reimburse the owner for all the costs the owner incurred in letting the property.

"You have to pay the rent until the end of the lease or until the property is re-let.

"Breaking a lease is permissible but very costly."

Mr Airey said tenants who had signed leases at the height of the boom were even worse off.

"They are facing huge bills because properties can only be re-let they what they were previous paying," he said.

"For example, if you're renting a property at $600 a week and now it can only be rent at $500 a week, that's $100 a week difference for the term of your lease."

Mr Airey said if tenants could not pay the costs, outstanding monies could be pursued through the court system and result in a blemished tenancy record.

"Laws offer a lot of protection for tenants but you cannot be protected from the contract," he said.

Not just residential

Last week economic forecaster BIS Shrapnel released a snapshot of Perth's office market.

It found a decline in mining sector investment and a glut of new offices were hindering lease activity in the CBD.

BIS Shrapnel economist Lee Walker told the ABC the trends are concerning.

"We are entering a period of falling resources investment and we have already seen a significant setback to demand," he said.

"We anticipate this is only the start of it and the Perth office market is at the beginning of what is a moderately strong round of office construction."

Mr Walker says he anticipates around 165,000 square metres of office space will come online in the near future, but that only 50 per cent of that space has pre-committed lease agreements.