24 August 2020
The Perth rental market’s vacancy rate has dropped to 1.6 per cent, which is the lowest it has been since March 2008.
REIWA President Damian Collins said a vacancy rate around three per cent is generally considered to create a good balance between supply and demand.
“The vacancy rate has remained below three per cent for 21 consecutive months, which has ensured rents generally started to stabilise after the post mining boom downturn,” Mr Collins said.
“However, with it now sitting below two per cent, we are starting to see the impacts of limited stock, and it is only a matter of time before rents rise. In some areas, agents are reporting rents are already on the move up.
“We are also seeing vacancy rates decline in the regions, with some areas experiencing a vacancy rate lower than Perth, such as Albany and Kalgoorlie which are now at 0.9 per cent.”
Rental stock on reiwa.com
In July, there were 3,553 properties for rent on reiwa.com, which is 50 per cent less than what was available in July 2019 and it is creating competition amongst prospective tenants.
“There are a number of factors that may have contributed to lowering the vacancy rate, such as the lack of new supply due to investors staying out of the market, expats returning back to WA, and investors selling their investment properties,” Mr Collins said.
Rental searches on reiwa.com
According to reiwa.com data, there were 726,688 searches conducted for rental properties in WA during July demonstrating rental properties are in high demand, with Scarborough the top searched suburb (16,029 searches), followed by South Perth (12,341), Mandurah (11,901), Joondalup (11,792) and Subiaco (11,609).
Impacts of COVID-19
With the review of the Residential Tenancies (COVID-19 Response) Act 2020 coming up, it’s vital that the government remove all restrictions and limitations for non COVID-19 affected tenants.
“Investors are concerned about returning to the market due to the limitations on their ability to put rents to market and evict tenants who do not pay their rent. While we’d prefer to see the legislation lapse in its entirety, if there is an extension, it must be for the very small number of tenants still affected,” Mr Collins said.
“If we don’t encourage investors back into the market, then the rental shortage will only get worse.”
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14 May 2018
With steady rents, declining listings, improved leasing figures and faster leasing times, data for the March 2018 quarter reveals Perth’s rental market is leading the charge in Perth’s property market recovery.
REIWA President Hayden Groves said the first quarter of 2018 showed Perth’s rental market had strengthened, with improvements recorded across all key indicators.
“Perth’s rental market appears to be building on the momentum of the latter half of 2017, which is very encouraging – not just for the rental market, but also for the overall property market. Historically, the sales market follows the rental market during a recovery,” Mr Groves said.
Median rent prices
Perth’s overall median rent price is $350 per week for the March 2018 quarter.
Mr Groves said this was the twelfth straight month of stable rent prices, with no changes recorded since April 2017.
“All sub-regions experienced stable median prices except for the South West sub-region, which saw its overall median rent price increase $10 to $330 per week during the quarter,” Mr Groves said.
reiwa.com data shows there was a $5 per week increase to both the median house and median unit rent during the March 2018 quarter.
“The median house rent increased to $360 per week, while the median unit rent increased to $325 per week,” Mr Groves said.
“It bodes well for landlords that the house and unit median rents are improving simultaneously.”
There were 14,112 rental properties leased in Perth during the March 2018 quarter.
“Leasing volumes for the March 2018 quarter are up 4.2 per cent compared to the December 2017 quarter,” Mr Groves said.
“Four out of the five sub-regions saw an improvement in leasing volumes, with the Central sub-region (up 7.7 per cent) and North East sub-region (up 6.1 per cent) the stand-outs.”
At a suburb level, reiwa.com data shows East Cannington, St James, North Fremantle, Ellenbrook and Booragoon saw the biggest growth in leasing activity levels over the quarter.
Listings for rent
Rental listings declined 4.5 per cent during the quarter, with 8,508 listings recorded at the end of March 2018.
Mr Groves said there had been a substantial reduction in the number of rental properties available in Perth over the last 12 months.
“Compared to the March 2017 quarter, listings for rent are now 18.6 per cent lower than they were at the same time last year. This can be attributed to an increase in population growth to the state and fewer new dwelling commencements occurring in the metro area,” Mr Groves said.
Average leasing time
It was two days faster to lease a property during the March 2018 quarter than it was during the December 2017 quarter.
“It took 47 days on average for landlords to find a tenant during the March quarter, which is two days faster than the December quarter and three days faster than the March 2017 quarter,” Mr Groves said.
“With stock levels declining and leasing activity increasing, the Perth rental market is finally starting to re-balance. For tenants, now is a good time to secure a longer-term lease before rents rise.”
09 April 2018
Author: REIWA President Hayden Groves via reiwa.com.au
Although rent prices across the state have been on a downward trajectory for the last couple of years, the rate of decline has slowed with the median rent price holding steady at $350 per week since April last year.
The number of rental properties on the market has also improved, declining to approximately 8,500 listings metro wide, well down from the peak of 11,300 in 2016.
While Perth landlords don’t enjoy the dominance they experienced a few years ago, property investment is still a smart decision. And thankfully, interest rates on borrowings continue to sit at historically low levels, mitigating some of the short term financial discomfort resulting from lower rent prices.
Get your asking price right from the start
When pricing your property and preparing it for lease, it’s crucial you heed the advice of your REIWA property manager. Tenants are out there in good numbers, in fact, leasing activity reached an all-time high last year and remains at above-average levels in 2018.
Provided your rental property is marketed competitively, you have a very good chance of securing a tenant. However, if you choose to price your property higher than your agent’s recommendations, tenants are very likely to bypass your listing.
The first two weeks of listing your property for rent are the most crucial. Get your initial asking price wrong and you can end up chasing down the market, destined to end up with a weekly rent price below market value, plus you’ll bear the rent cost you missed out on when your property was vacant.
Forecast looks positive for landlords
Pleasingly for landlords, the Perth rental market has improved over the last six months and we are slowly seeing it transition into a more balanced market.
The Perth vacancy rate declined to 5.3 per cent in January – the lowest level since July 2015 and down from a peak of 7.2 per cent in June 2017. This sharp decline indicates that normalcy is returning and market parity, in terms of supply and demand, is not far away.
Despite these obvious improvements, REIWA’s forecast for 2018 cautions against expectations of rapid growth in rent prices over the coming year. Property owners are still advised to meet the market – you are better off with less rent per week than having a long vacancy period with no rental income at all.
It is also advisable to be flexible with the conditions you put on your rental. For example, not allowing tenants who own a pet to rent your property can deter people who would otherwise be interested. It’s in your best interest to consider tenants with pets on a case-by-case basis, secure in the knowledge the bond, pet bond and landlord insurance will be there to cover any pet-related damage.
For obligation free landlord assistance Sarah Morgan 9475 9622
12 March 2018
Perth’s vacancy rate has dropped to 5.3 per cent – the lowest since July 2015.
REIWA President Hayden Groves said Perth’s latest vacancy rate for January 2018 had improved significantly since June 2017.
“It’s quite remarkable to see it this low considering seven months earlier Perth’s vacancy rate soared to 7.3 per cent – the highest we have ever experienced, and now it’s back at levels last seen in 2015.
“The vacancy rate is a good indicator for how the entire rental market is tracking, with reiwa.com data for February showing stable rent prices and declining listing levels. Leasing activity did drop off in February, however levels are still healthy and trending above long term averages,” Mr Groves said.
The reiwa.com vacancy rate is compiled using data obtained from a monthly survey of REIWA members. The survey details how many rental properties members manage and how many of those are vacant.
Mr Groves said there were a number of factors that had contributed to lowering the vacancy rate, such as an increase in population growth and a reduction in average tenure time.
“Population growth in WA has started to improve. Rental markets always feel the effects of population trends, with new entrants into the state the first to soak up rental stock.
“Tenants are also moving more frequently. In 2014 for example, the average tenure time was 45 months, fast forward to 2017 and it’s now 34 months, which is almost a full year less. This has led to an increase in leasing activity which has driven demand for rentals and had a positive effect on the vacancy rate.
“Another contributing factor is the reduction in the number of new dwelling commencements across the Perth Metro area. This has played an important role in lowering the vacancy rate. With less new dwellings coming onto the market, existing rental stock is now being soaked up, which is why rental listings have declined 19 per cent over the last year.
“After a challenging few years for landlords and investors, it’s pleasing to see some parity return to the rental market, with tenants and landlords seeing benefits simultaneously,” Mr Groves said.