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Perth hits a rental crisis as its residential vacancy rate continues to rapidly decline, dropping to below 1 per cent for only the third time in 40 years.
The Real Estate of Western Australia found that’s vacancy rate has fallen to 0.96 per cent in October, the lowest it has been in 13 years.
According to REIWA president Damian Collins, the vacancy rate is tracking to potentially reach the lowest it has been, which was 0.8 per cent in March 2007.
“With rental listings in Perth falling 8 per cent to 2,926 over the month, we have certainly hit a rental crisis where tenants looking for a rental will potentially find themselves unable to find a home,” Mr Collins said.
“In addition, the reduced supply is putting upward pressure on rents with property managers on the ground finding increases in rent are occurring on new leases, as prospective tenants are in competition with each other to secure the limited supply.”
Typically, around this time, experts are expecting to see investors enter the market, as well as an increase in stock levels to ultimately balance supply and demand.
However, at the moment, there are still low levels of investor activity, according to Mr Collins. “If investors are not encouraged back into the market, then the rental crisis will only get worse.”
Western Australia has approximately 17 per cent of properties purchased by investors, whereas REIWA normally expects to see investors buying 30 per cent or more of the available properties.
At the same time, they still have investors exiting the market, meaning that the supply of rental properties is not sufficient to keep up with demand.
“To entice investors back into the market and increase stock levels, we need to ensure that the emergency residential tenancy laws are removed in March 2021. The government needs to send a clear signal to the market that they have no intention of extending the legislation further if we remain relatively COVID-19 free,” Mr Collins concluded.
“Otherwise, investors will continue to sit on their hands and make a bad situation even worse.”
A vacancy is a term that describes an unoccupied or empty space.