New tenants are finding it increasingly difficult to secure a property, spurring what’s being dubbed a “recipe for disaster” by the state’s real estate body.
The Real Estate Institute of Western Australia (REIWA) said the state’s rental market is expected to worsen for new tenants after the last month saw vacancy rate drop again by 0.3 per cent.
This, combined with the extension to the emergency tenancy laws by the WA government, is furthering the struggle for tenants who are yet to find a property.
REIWA president Damian Collins said that in just two months, ’s vacancy rate has gone from 2 per cent to 1.3 per cent and is expected to continue lowering over the coming months.
“The McGowan government’s shortsighted decision to extend the emergency period for all tenancies is making a difficult problem even worse,” Mr Collins said.
“Unfortunately, sitting tenants are unlikely to move or adjust household size as they are paying below market rents. In addition, we are seeing an influx of people trying to find a new rental property in a market with a very low vacancy rate.”
Instead of a blanket extension, Mr Collins said criteria should have been added to the legislation so that only those impacted financially by COVID-19 received the support that they need.
“Right now, investors are sitting on the sidelines partially due to the COVID-19 residential tenancy laws, and by extending the legislation on all properties, it means investors are likely to continue to stay out of the market, which will further reduce supply at the worst possible time,” Mr Collins said.
“It’s not too late for the McGowan government to change their position, as we need to get investment confidence back, so investors bring the badly needed supply of rental properties back into the market.
“Without any change in the policy, it’s feared that a rental shortage will quickly turn into a rental crisis.”