Hotspots reignite in WA as rental demand surges
Every aspect of Perth’s rental market over the September 2018 quarter is benefiting property investors as rental supply is down while demand is up, according to the Real Estate Institute of Western Australia.
REIWA president, Damian Collins, said leasing activity was up, median rents remained stable, stock levels had reduced, average leasing times were quicker and the vacancy rate had “plummeted” to its lowest level in more than four years.
“The rental sector is really leading the charge in the Perth property market recovery,” he said.
“The September 2018 quarter results are very encouraging and should provide landlords and investors with a lot of confidence.”
Rent
Mr Collins said Perth’s overall median rent price held at $350 per week for a sixth straight quarter.
“Prices remain affordable for tenants, but the last 18 months have provided landlords with some much-needed consistency.
“Additionally, when we isolate this quarter’s leased properties to houses, REIWA analysis shows the median house rent actually increased $10 this quarter to $360 per week, which is a good sign for the overall market.”
He added that REIWA analysis shows 105 suburbs across the metro area saw their median rent increase during the September 2018 quarter.
“The five best performing suburbs for overall rent price growth were Kallaroo, City Beach, Gwelup, Cottesloe and Alexander Heights,” said Mr Collins.
“Other top performers were Connolly, Inglewood, Ashby, Beaconsfield and Wembley.”
Leasing
Mr Collins said there were 13,234 properties leased during the September 2018 quarter.
He said leasing activity had increased 5.2 per cent compared to the June 2018 quarter.
“Tenants were a lot more active this quarter than last, with 132 suburbs across the metro area recording increases in the number of properties leased.
“Activity remains high in the rental market. Provided landlords are listening to the advice of their property manager and pricing their rental in line with market expectations, they have a very good chance of securing a tenant.”
Listings
Mr Collins also said there were 7,286 properties for rent in Perth at the end of the September 2018 quarter.
“Listings for rent have improved considerably, with REIWA data showing stock levels are down 11.9 per cent compared to the June 2018 quarter and 25.1 per cent compared to last year’s September quarter.
“This sharp decline can be attributed to a combination of leasing activity improving and new dwelling commencements slowing. With less new properties coming onto the market, rental stock is being absorbed at a quicker pace, which has put downward pressure on listing volumes.”
Days on market
He said it took landlords 46 days on average to find a tenant for their rental during the September 2018 quarter.
“This is one day faster than the June 2018 quarter and eight days faster than the September 2017 quarter,” said Mr Collins.
“A combination of increased tenant activity and lower listing levels has had a positive impact on average leasing times for landlords, with tenants needing to act quicker to secure a rental.”
Vacancy
Mr Collins said Perth’s vacancy rate declined to 3.9 per cent during the quarter – the lowest level Perth has experienced since the March 2014 quarter.
“With all key market indicators improving during the September quarter, Perth’s vacancy rate has now fallen below the 10-year average,” he said.
“Slowly but surely we are moving towards parity in the Perth rental market, with improved conditions across the board meaning there is good opportunity for tenants and landlords to benefit simultaneously.”
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