The residential vacancy rate across Perth declined slightly in October, coinciding with a drop in new investment financing.
The Real Estate Institute of Western Australia (REIWA) noted October’s residential vacancy rate inas slightly lower than September’s, now sitting at 0.95 of a percentage point.
It’s close to the 40-year low of 0.8 of a percentage point reached in 2007.
REIWA president Damian Collins said that despite the vacancy rate squeeze and low interest rates being on offer, the market still lacks any significant response from investors.
As vacancy rates come closer to the 40-year low, investor lending activity remains at low levels, with demand for investor finance 77 per cent lower than its peak.
“In 2007, when the vacancy rate hit below 1 per cent, investor lending activity in the peak six-month period was $5.8 billion,” Mr Collins said.
“However, despite seeing the same investment opportunities, investor lending finance in the six months to September 2020 is 77 per cent lower than this.”
The REIWA has welcomed recent indications from the WA government that it would not be extending emergency tenancy laws, noting it as “critical” that investors get back into the market.
“Otherwise, there will be a significant increase in the demand for public housing,” he warned.
The REIWA found that there were only 2,786 properties listed for rent on reiwa.com.au by the end of October, which was 53 per cent less than the year prior.
Perth’s median rent increased by $25 to $375 per week when compared to 2019 data. Still, the WA capital remains the cheapest capital city to rent across Australia.
Right now, the proportion of family income needed to meet rent repayments in REIA’s Housing Affordability Report is 16.1 per cent in WA, making it the most affordable capital city in Australia. The ACT follows behind, with 19.2 per cent of family income needed to meet the average rental repayment.
Mr Collins did indicate that he expects further increases to rent in the city moving forward, noting that “when the freeze on rents was put in place, Perth’s median weekly rent was sitting at $350, which is far from the $450-plus rents many experienced during the boom in 2013”.
“While the potential increase will impact some people, most will be able to adjust household size and location which will free up stock and help limit rent increases to a slower, manageable pace,” he concluded.