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Perth rental vacancies plunge to record low

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Competition for vacant properties in Perth is getting intense, according to agents. Photo: Shutterstock

Perth rental vacancies plunge to record low

Perth’s residential vacancy rate has fallen to an equal historic low, with the city’s dwindling number of available rental properties starting to put upwards pressure on rents.

Perth’s residential vacancy rate has fallen to an equal historic low, with the city’s dwindling number of available rental properties starting to put upwards pressure on rents.

The Real Estate Institute of WA said Perth’s vacancy rate fell to 0.8 per cent in November, the lowest level on record that was previously seen once before, in 2007.

REIWA president Damian Collins said listings were down 52 per cent on the same time last year, with median rents rising $10 per week to hit $390/week.

Mr Collins said the increases hadn’t yet changed Perth’s status as the most affordable capital city rental market in Australia.

The Real Estate Institute of Australia’s latest housing affordability report showed just 17 per cent of family income is required to meet the median rent in Perth.

“As we head into 2021, we can expect rents to increase due to supply and demand factors, and this hopefully will encourage investors back into the market to increase stock levels, however we anticipate that rents will not increase to surpass our east coast counterparts on the affordability scale,” Mr Collins said.

“It is likely that we will reach the all-time low vacancy rate in early 2021, however, once the market returns to normal at the end of the moratorium in March, we can hope to see a return of investors to the market and tenants adjusting household size, which will help to balance the market.”

WA-based Herron Todd White director, Chris Hinchliffe, said Perth’s rental market had been affected by a flood of expats returning to WA at the same time positive consumer sentiment surged as the state navigated its way out of the COVID pandemic successfully. 

“Western Australians returning from overseas have been cramped into space in the homes of friends and family whilst looking for alternative housing options,” Mr Hinchcliff said. 

“Unfortunately, this has now led to a severe rental shortage.

“While this may be good for investors and will also apply upward pressure to house prices, REIWA estimates that Perth will run out of rental stock by early 2021, with some property managers reporting 30 to 40 applications per property. 

“We’re seeing investors already returning to the market to take advantage of the rental returns on offer, but also the risk sentiment to residential real estate appears to have altered, with agents reporting that clients now see it as a relatively safe place to park money.”

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