By REIWA President – Damian Collins https://reiwa.com.au/
Perth’s rental vacancy rate is the lowest it has been in more than five years, according to REIWA. It dropped to 2.8% in the December quarter 2018 from 3.8% in the previous quarter. President Damian Collins said the last time the vacancy rate was that low was March 2013. “The rapid improvement we’ve observed in the last 18 months is impressive, especially considering the vacancy rate peaked at 7.3% in June 2017 – the highest it’s ever been,” he said.
“Now that the vacancy rate is below 3%, we can safely say the market is in a recovery phase, with landlords now the beneficiary of the current rental environment,” Mr Collins said. Perth’s overall median rent remained at $350 per week for the seventh consecutive quarter, the longest stretch of stable rents since reiwa.com started collecting rental data in 2001. Despite the overall median remaining steady, 105 suburbs recorded an increase in price.
“When we drill down further and isolate houses and units, the results of the December quarter are very pleasing for landlords, with both houses and units experiencing increases in rents,” Mr Collins said. “The median house rent increased $10 per week to $360 while the median unit rent increased $5 per week to $325 – this improvement did not translate into an increase in the overall median, as there were more units leased during the quarter than houses, which has kept the overall median stable.” Mr Collins said, “If the rental market continues on its current trajectory, we should see Perth’s overall median rent price increase in 2109.”
There were 12,917 properties leased in Perth during the December quarter, slightly below the September quarter figure of 13,234. Mr Collins said the decline was common over the festive season, with activity tending to decline in December before increasing again early in the new-year.
The five suburbs to experience the biggest increase in leasing activity (percentage wise) were Kallaroo, Daglish, Melville, Merriwa and Hilton, while the suburbs with the highest volume of leased properties were Perth, East Perth, Scarborough, Baldivis and Maylands. The average time to lease a property was 44 days, down from 48 days in the September quarter and 50 days in the December quarter 2017. At the end of the quarter there were 6,865 properties for rent in Perth.
“Listings continue to reduce, with the December quarter figure down 10% on the September quarter and a substantial 27% on the same time last year. The sharp decline in listings is the driving force behind why Perth’s vacancy rate has improved,” Mr Collins said. “With population growth in WA on the incline and fewer new building projects commencing, listing stock is being absorbed more quickly.”
With the vacancy rate falling and REIWA members reporting a significant increase in the volume of enquiries for rentals in January, Mr Collins said the signs for 2019 were promising. “The rapidly improving rental landscape combined with Perth’s favourable buying environment should hopefully see more investors enticed back to the market,” he said.