The capital city market set to continue its recovery this year has seen further progress with its vacancy rate falling to its lowest point for more than the last five years.
’s vacancy rate has continued to declined to 2.8 per cent according to data from the Real Estate Institute of Western Australia, which REIWA president Damian Collins claimed is the lowest point since March 2013.
“The rapid improvement we’ve observed in the last 18 months is impressive, especially considering the vacancy rate peaked at 7.3 per cent in June 2017 – the highest it’s ever been,” Mr Collins said.
“Now that the vacancy rate is below three per cent, we can safely say the market is in a recovery phase with landlords now the beneficiary of the current rental environment.”
Median rents for Perth were stable at $350 per week over the December quarter, the seven quarter in a row to hold at that level.
“When we drill down further and isolate houses and units, the results of the December quarter are very pleasing for landlords, with both houses and units experiencing increases in rents. The median house rent increased $10 per week to $360 during the December quarter, while the median unit rent increased $5 per week to $325,” Mr Collins said.
“This improvement didn’t translate into an increase in the overall median as there were more units leased during the quarter than houses, which has kept the overall median stable.
“If the rental market continues on its current trajectory, we should see Perth’s overall median rent price increase in 2019, which will be a welcome development for landlords.”
Over the quarter, 12,917 properties were leased, which Mr Collins said was seasonally expected, with potential tenants focusing on the festive season rather than going out looking for properties.
The suburbs that saw the largest increase in leasing activity in terms of percentages were Kallaroo, Daglish, Melville, and , and the suburbs with the highest volume were Perth, East Perth, , Baldivis and .
The end of the December quarter saw rent listings decline 10 per cent over the December quarter and 27 per cent compared to this quarter last year to 6,865 properties.
“The sharp decline in listings is a driving force behind why Perth’s vacancy rate has improved. With population growth in WA on the incline and fewer new-building projects commencing, listing stock is being absorbed more quickly,” Mr Collins said
Rental listings saw their days on market speed up by four days to 44 days over the December quarter when compared to the September quarter.
“With fewer available rentals on the market, competition among tenants has increased requiring them to act faster to secure a lease,” Mr Collins said.
“The signs for 2019 look very promising. The rapidly improving rental landscape combined with Perth’s favourable buying environment should hopefully see more investors enticed back to the market.”