PERTH’S residential rental vacancy rate is at a 12-year low, and the shortage of stock is creating strong competition among tenants, particularly for houses.
Reiwa data places the vacancy rate at 1.6 per cent, the lowest level since March 2008, with the number of properties for rent at the end of July 50 per cent lower than the same time last year.
“It’s very buoyant, with not much property around and lots of tenants looking for properties,” president Damian Collins said.
“We’re finding that where properties are vacant, they’ve got substantial demand, with 40-50 people booked to come through home opens.”
Mr Collins said areas in the northern suburbs, along the freeway and near the coast, were experiencing the strongest demand, with any vacancy filling quickly.
“Beldon down to Warwick and Duncraig, Padbury, those regions, that’s where we’re seeing really strong demand, because a lot of people want houses and there’s not many around,” he said.
“The market is tight everywhere; if you were going to say an area was less tight it would be the city apartment market — it’s still good, but that’s where there’s a bit more choice.
“But if you want a house, near the schools, freeways, the train stations, they’re in very, very short supply.”
Mr Collins said it was only a matter of time before rents rose.
“In some areas agents are reporting rents are already on the move up for new leases,” he said.
“Along that northern corridor, some are seeing $10 to $50 per week increases, particularly for houses because there’s very limited choice.”
Tenants can take heart that rents are still well below the level they were several years ago and it will take them a while to climb.
“The last time the vacancy rate was this low (median) rents were about $350/360 a week,” Mr Collins said.
“We had the mining construction boom and they went up to $450 a week and since that downturn they’ve come back down to $360 a week.”
One factor that might impact prices is the lack of investors in the market.
“Normally in this sort of environment, with plummeting vacancy rates, low interest rates and the rental return up to 4-5 per cent, you would see a strong surge in investors, but they’re just not there,” Mr Collins said.
“The only thing that will solve the problem is market supply and demand and if rents start to go up, more investors will come in and that will help mitigate those increases.”
Mr Collins believed the ongoing lack of price growth was deterring potential investors, along with the COVID-19 emergency period legislation, which is due to end on September 29.
“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,” he said.
“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.
“If we don’t encourage investors back into the market, then the rental shortage will only get worse.”
Source From: PerthNow