Property managers expect the end of Western Australia’s coronavirus eviction moratorium will help ease the drastic shortage of rental properties as investors return to the market.
WA’s year-long rental moratorium on evictions and rent increases ended on Sunday, allowing landlords to raise prices and evict tenants.
The WA government introduced a six-month rental moratorium in March last year in the wake of the COVID-19 pandemic to safeguard those in financial distress. It was extended in September for another six months.
Real Estate Institute of WA president Damian Collins said the extension had been debilitating for the state’s rental market, which had seen Perth’s vacancy rate drop below 1% – the lowest level in 40 years.
“There is very little available rental stock on the market and those people who are actively looking for somewhere to rent are finding it very difficult to secure a place to live,” Mr Collins said.
“The rent increases are now starting to come through and we are certainly seeing a bit of movement this week, but most of the agents I speak to, it’s only a small percentage of their portfolio where people are leaving.
“While market rents are up, we’ve still got the cheapest rents in the country. If you look at the average rents compared to the average incomes, in WA it’s less than 18%.
“In NSW and Tasmania, it’s upwards of 30%, so we have incredibly cheap rents in WA. They are still below where they were in 2015 when they were $450 a week. Now they’re $400 a week.”
Mr Collins expected investors would now have more incentive to buy property in WA, which would likely boost the number of properties available for rent.
“Investors have been very light on in WA for a long time. Our estimate is that 15-18% of the market [are investors] and we normally expect it to be 40-50% when the vacancy rate is this low,” he said.
“Now that the emergency period is officially coming to an end, investors will be more inclined to buy property in WA again, which will help increase housing supply for tenants.”
Rentwest general manager Michelle Rigg said there had been extreme pressure on property managers and related service providers, such as cleaners and removalists, since the moratorium ended on Sunday.
Ms Rigg said there was also an air of desperation among rental seekers struggling to find homes amid a shortage of available properties.
She added that it is premature to expect investors to return to market so soon given there is still uncertainty with border closures.
“You’re looking at some slight relief, perhaps mid-year, when the tenants who are building will leave the market, but the state government really hasn’t done anything to encourage investors into the market other than the building sector,” she said.
“Of course, those buildings take six to 12 months to come to fruition and there’s been no incentive from the government for investors to buy established houses. They’re not doing a lot as far as creating public housing, so it’s very much reliant on the private sector.”
Source from: realestate.com.au