Rents in Perth increase again as vacancy rate still tight: REIWA
Rents in metropolitan Perth have increased again in the last quarter as vacancy rates remain tight, according to the Real Estate Institute of Western Australia.
In the three months to July, rents increased $10 a week to a median of $440 per week. That’s $450 a week for houses and $420 a week for units and apartments.
The quarterly found the vacancy rate has remained at 1.9% due largely to population growth and limited housing stock.
REIWA’s David Airey says the vacancy rate traditionally eases during the winter months and the current situation is unusual.
“The equilibrium for vacancy rates across Perth sits at around 3%, so the current rate of just under 2% is a third below where it would normally be,” Airey says.
There are currently 2,440 rental properties on the market, down from a peak of 3,708 in the first week of July last year.
“As the number of rental properties diminish rents are being pushed up. It’s a classic case of supply and demand being driven by population growth and weak investor activity,” Airey says.
He says the rents increases in Perth are causing more people to break their leases.
“Some people are breaking their lease to move into a more affordable place if they find one, some tenants have bought a home of their own to move into, while many younger tenants might be returning to the family home to live with mum and dad.”
Airey says the situation is unlikely to change soon.
“I can’t see this rental situation changing in the short term, particularly given that the market tends to pick up in spring. The bottom line is that our population growth is higher than the rest of the country, and everyone needs somewhere to live."
“Hopefully the strong first-home buyer activity will see many current renters moving into a home of their own incoming months, freeing up rental stock and helping to ease the vacancy rate.
“We may also see investors return to the Perth market in greater numbers now that the rental yield has improved, house prices have stabilised, interest rates are steady and demand for accommodation is likely to continue for some time.”
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