Property glut will force Perth rental property owners to sell

According to Property Club’s WA spokesperson Troy Gunasekera, there are over 1,200 vacant rental properties around East Perth, Subiaco, North Perth and South Perth, and says Property Club has been warning its members of a glut in inner-city Perth for the last three years.

“It is no surprise that East Perth and the Perth CBD account for two of the top four suburbs in Perth with the highest number of vacant properties,” Mr Gunasekera said.

He attributes the glut to the apartment boom in the Perth area and the federal government changes to the 457 visa, claiming the inner-city areas attract a large number of short-term migrants.

“The current glut of rental properties in the inner city of Perth is now having a major impact on the level of rent landlords can charge,” Mr Gunasekera said.

According to Property Club data, landlords who received $550 per week for a two-bedroom, two-bathroom apartment in the inner city two years ago are now receiving $330 per week.

“That is a drop in the weekly rent of around 40 per cent in rents in just two years.”

Mr Gunasekera added that the combination of the glut and recent pressure from the big banks through the increase of interest only loans for investors to over 6 per cent will force property sales in inner-city Perth over the next 12 months because investors will be unable to cover mortgage repayments and finance their properties.