It’s no secret that the Western Australian property market is experiencing a rental shortage. There are low levels of stock and high levels of demand resulting in a vacancy rate that remains near record lows. WA needs an increase in investor activity to help keep up with the rising demand from tenants.
There are currently less than 2,500 properties for rent in Perth making it an ideal time for investors to jump into the WA market and take advantage of the favourable investment conditions.
Competition among tenants is high, rent prices are rising and yields are healthy, so if you have been thinking about buying an investment property in WA, now would be an opportune time to act.
But which Perth suburbs are most in need of rental properties?
REIWA conducted an analysis of the Greater Perth region to find out which suburbs were most in need of investors.
The analysis aimed to determine where the tightest relationships were between supply and demand based on how long a suburb’s annual leasing rates would take to absorb all the rental stock available in the area at the end of August 2021*.
Based on this analysis, REIWA has narrowed down the 10 Perth suburbs where the rental shortage is most acute and where investors are subsequently most needed.
Forrestfield
Forrestfield is the Perth suburb most in need of investor activity, with REIWA analysis revealing it has just four days of rental stock available at the end of August.
Forrestfield is located 18 kilometres south-east of the Perth CBD. It has a median rent price of $400 per week and a healthy rental yield of 4.8 per cent.
The median sale price for dwellings (houses and units) grew 15.1 per cent to $430,000 in Forrestfield during the year to August 2021.
Wellard
Wellard was the second most in-demand Perth suburb, with REIWA analysis finding that it had six days left of stock at the end of August.
Located 40 kilometres south of Perth’s CBD, Wellard has a median rent price of $415 per week and a strong rental yield of 5.2 per cent. Its median dwelling sale price grew 13.5 per cent to $415,000 in the year to August 2021.
Kinross
Kinross was the third most in-demand suburb on the list for rentals, with just seven days of rental stock available at the end of August 2021.
Kinross is located 30 kilometres north of the Perth CBD.
It has a median rent price of $500 per week and a rental yield of five per cent. Its median dwelling sale price grew 9.6 per cent to $520,000 in the year to August 2021.
Bibra Lake
In fourth place was Bibra Lake, with seven days of rental stock available at the end of August.
Located 22 kilometres south of the Perth CBD, Bibra Lake has a median rent price of $460 per week and a rental yield of five per cent.
Its median dwelling sale price grew 5.1 per cent to $482,000 in the year to August 2021.
North Beach
Rounding out the top five was North Beach, also with seven days of rental stock left at the end of August.
North Beach is a northern-coastal suburb located 16 kilometres from Perth’s CBD. It has a median rent price of $613 per week and a rental yield of 3.4 per cent.
North Beach’s median dwelling sale price grew 12.8 per cent to $946,000 in the year to August 2021, which is the highest median on the list.
Two Rocks
Two Rocks is next on the list, with eight days’ worth of rental stock left at the end of August. Two Rocks is located 63 kilometres north of the Perth CBD.
It has a median rent price of $415 per week and a rental yield of 5.4 per cent. Its median dwelling sale price grew 10.8 per cent to $400,000 in the year to August 2021.
Beechboro
Beechboro is seventh on the list, having eight days of rental stock left at the end of August. Beechboro is located 14 kilometres north-east of the Perth CBD.
It has a median rent price of $380 per week and a rental yield of 5.1 per cent. Its median dwelling sale price grew 11.7 per cent to $385,000 in the year to August 2021.
Beeliar
Beeliar also had eight days of rental stock left at the end of August, according to REIWA’s analysis. Beeliar is located 27 kilometres south of the Perth CBD.
It has a median rent price of $450 per week and a rental yield of 4.5 per cent. Its median dwelling sale price grew 4.9 per cent to $515,000 in the year to August 2021.
Iluka
Illuka comes in at nine on the list, with eight days of rental stock left at the end of August. Illuka is located 31 kilometres north of the Perth CBD.
It has a median rent price of $850 per week – the highest on the list, and a rental yield of 5.3 per cent. Its median dwelling sale price grew 1.2 per cent to $840,000 during the year to August 2021.
Lakelands
Lakelands completes the list and is the fourth suburb in a row to have had just eight days of rental stock available at the end of August. Lakelands is located 64 kilometres south of the Perth CBD near Mandurah.
Its median rent price is $420 per week and it has a rental yield of 5.6 per cent – the highest on the list. Lakeland’s median dwelling sale price grew 7.2 per cent to $388,000 during the year to August 2021.
To put the above figures into perspective, when the same analysis was applied to the Greater Perth region, it found that Perth had 23 days of rental stock left at the end of August if annual leasing rates continued at their current pace.
This figure (while still low) is significantly more than the 10 suburbs that made this list and demonstrates how strong the demand is for rental properties in the suburbs listed above.
Ultimately, there are many factors to consider when buying an investment property. You are dealing with two markets (sales and rental) simultaneously which can be tricky to navigate without expert assistance.
If you are considering investing in WA, I would highly recommend engaging a REIWA buyer’s agent to work with you.
Their knowledge and expertise of the WA sales and rental markets, plus their suburb level understanding will give you a competitive advantage when investing in property in WA.
*REIWA’s analysis did not factor in new listing stock coming to market after 31 August 2021.
