Weak Perth rental market foreshadowing softened market overall
The number of vacant rental properties in Perth are declining steadily, which, according to an expert, indicates the Perth market has bottomed.
Irene Limnios, managing director of Limnios Property Group, said the inner-city Perth area has been experiencing a decline in vacant rental properties over the last few months.
This is corroborated with data from the Real Estate Institute of Western Australia, which shows a loss of 880 rental properties when looking at this time this year and last year – 10,187 properties from 11,067 last year.
“Not only are the number of rental properties declining but the time in which it takes to lease them is also falling,” Ms Limnios said.
“Limnios Property Group figures shows that the overall time to lease a vacant rental property with our company has fallen by half the time during the past year.
“The rental market has traditionally been a forward marker for the overall health of the property sales market. When vacancy rates increase and rents fall, it shows weak demand in the property market and this is followed by falling property prices.”
This, Ms Limnios said, shows a weak rental market, which trends show precedes a softening of the overall sales market.
“However, improving conditions in the rental market indicates that the supply and demand for homes [are] now reaching a balance and this positive trend should have a positive flow effect onto the property sales market in Perth over the coming year,” she added.
“Overall, the Perth rental vacancy rate is expected to decline over the coming year as a result of an improving economy and a decline in new home building starts.”
With over 10,000 currently vacant properties available, landlords who intend to succeed profit-wise need to set rents at competitive rates until rental vacancy rates are much lower, Ms Limnios suggested.
“In particular, landlords need to be very competitive in the unit market with more than 4,000 units currently vacant in Perth,” she said.
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