New data shows that rental yields in Perth continue to grow, with tight vacancy rates and huge population growth driving the sector upwards.
In the three months to July, rents were up by $10 per week to a median of $440 per week.
The Real Estate Institute of Western Australia (REIWA) says this breaks down to a median of $450 per week for a house and $420 per week for a unit or apartment.
The data also shows that the vacancy rate across Perth remains tight at 1.9 per cent, due largely to housing stock not keeping up with population growth.
REIWA President David Airey said it was unusual that the vacancy rate didn’t ease during the winter months which had traditionally been the case.
“The equilibrium for vacancy rates across Perth sits at around three per cent, so the current rate of just under two per cent is a third below where it would normally be,” Mr Airey said.
There are around 1300 less properties on the market for rent this year when compared to last year, a trend which should continue if the housing sector doesn’t pick up.
“As the number of rental properties diminish, rents are being pushed up. It’s a classic case of supply and demand being driven by population growth and weak investor activity,” Mr Airey said.
The results come as the suburb of Cockburn to the south of Perth is looking to expand and develop 1,100 apartments to house around 2,000 people.
However, REIWA is experiencing higher numbers of tenants breaking their leases early in search of cheaper alternatives.
“Some tenants have a bought a home of their own to move into while many younger tenants might be returning to the family home to live with mum and dad,” Mr Airey said.
Speaking with Smart Property Investment, Michelle Williams, managing director of @Home Property Management, and the national winner of the 2012 PPM Property Management Department Award agreed that it’s only going to get busier.
“Peak season for property management starts from mid November through to early March and the activity is driven by a few factors.
“Many property investors choose to expire leases in and around that time due to the increased activity in the rental market.
“A mixture of university students and people arriving into the State for new employment increases demand during the spring and summer months.
“We also see increased activity with new business with people renting their homes as a result of employment transfers.”