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Rental stock levels in Perth have dropped to the lowest level recorded since November 2013 – a positive news for property owners, according to Momentum Wealth.
Recent data from the Real Estate Institute of Western Australia showed that listings for rent dropped below 5,000 to 4,676 listings in the week ending 31 May.
Team leader of Momentum Wealth’s property management team Amanda Kroczek said that the return to a downward trajectory in rental listings comes from a renewed uplift in leasing activity and limited new stock coming to market.
Despite an initial slowdown in tenant activity in response to social distancing restrictions and market uncertainties surrounding COVID-19, REIWA data showed that leasing levels rebounded by 27 per cent in May.
Combined with the limited new stock coming on stream, this has supported a continued reduction in rental stock, according to Ms Kroczek.
“These factors have also supported the resilience of rental prices across ” she said.’s leasing market over the COVID-19 period, with the median rent holding steady at $350 per week, and this could actually be primed to increase if current trends persist,
However, Ms Kroczek said that, while tightening stock levels meant some regions could be well positioned for a return to rental growth once the emergency period is lifted, the effects are not being felt equally across the market.
Some regions such as Perth’s north-west suburban corridor saw rental stock reduce by over 48 per cent in the year to June 2020, while some areas such as Perth’s inner region recorded a much lower rate of reduction at 15 per cent largely due to the large composition and continuing supply of apartment stock in these CBD areas.
Property owners are therefore advised to remain conscious of local market conditions when determining their rental strategy.
“Given the disparity of performance across the market, it’s really important for owners to work together with their property manager to ensure they are setting the right pricing strategy for their individual property and the conditions in their local area to make sure they are maximising their property’s performance and mitigating the risk of costly vacancies,” she said.
Owners in these low stock locations who aren’t in a position to increase rents need to remain proactive in their rental strategy, Ms Kroczek highlighted.
“While rent increases will not be permitted for lease renewals and existing tenancies until the end of the emergency period in WA, owners in locations benefiting from low stock levels should continue working with their property managers to ensure they are positioning their properties to leverage these anticipated improvements when the market [readjust],” she concluded.