Real estate commentators are calling on the federal government to reduce stamp duty costs in a bid to drum up investor activity.
The Real Estate Institute of Western Australia president Alan Bourke said stamp duty costs were stopping investors from buying property.
Instead, these investors are looking at alternative investment options.
"We are seeing some investors move from property to cash as a better return on investment, and a nice and easier return on their money," he said.
"When they do that, we have less stock for our tenants, and that can lead to higher rent."
Mr Bourke said the high rates of stamp duty and other land taxes have helped create a flat market with limited rental properties.