Extracted from ‘The Sunday Times’
The number of residential rental agreements signed in Perth in the first quarter of the year leapt 131% compared to the first quarter of 2018, according to Knight Frank’s recent research report Residential Local View Q1 2019.
“There is a clear increase in leasing activity when compared with this time last year,” Knight Frank Director and Head of Residential Property Management WA Tom Berry said. “The number of people attending property inspections has grown noticeably and most are less complacent now the market is strengthening – we are witnessing quicker turnaround times for the submission of applications, with some starting to miss out on their first choice,” he said.
Mr Berry said, “The first rental increases are coming through now and a few of our tenants are considering whether now is the time they should but their first home – all trends we haven’t seen for some time.”
One segment to record noticeable growth was the interstate market. “The local-based market is still moving about, which is great for stability, but in the past quarter we have witnessed a stark increase in those moving from interstate,” Mr Berry said.
The report found the number of contracts signed by people moving to Western Australia from other states increased from 14% of all leases in the first quarter of 2018 to 19% of all leases in the corresponding quarter in 2019. Tenants worked in two main industries, the research revealed – in resources (from 17% in 2018 to 31% in 2019) and in finance (up from 10% to 13% in the same period).
“With business confidence building and office vacancy tightening in the CBD, there has been a noticeable increase in the number of tenants working in the finance sector who have signed tenancy agreements,” Mr Berry said.
“There’s a clear sign of activity picking up in the resources sector again, as relocation agents are very much in the market.” This is a trend Nicheliving Manager Residential Property Management and Sales Peter Taliangis has noticed. “There has probably been a 20% increase in applications from interstate people – there is definitely a job/employment-based demand filtering into the rental market.”
“We are expecting many of them to settle in for 6-12 months and then start looking at house and land packages or established housing to buy once they have work history and feel comfortable in Perth.”
Mr Taliangis said, however, that the activity in the market was not limited to this group of tenants. “There’s definitely been an upswing in interest mainly from People new to Perth from overseas who have been here between a few weeks and three months,” he said. “They stay with friends and take up short-term accommodation initially, then look for 6-12 month leases.”
He said he had noticed an overall uptick of interest in the rental market. “The enquiry rate on many of our properties has gone from 2 to 3 people per inspection at some properties to 40 people at one inspection recently – we have definitely seen an increased interest across the board and we are managing properties from Mandurah to Mindarie.
Most tenants in this market should be expecting rent increases in the near future,” he said.