Rents in metropolitan Perth rose by $10 in the three months to July, to a median of $440 per week, according to new data from the Real Estate Institute of Western Australia (REIWA).
The increase, which was made up of a median of $450 per week for a house and $420 per week for a unit or apartment, comes as the vacancy rate across Perth remains tight at 1.9 per cent.
SQM Research reported an even tighter vacancy rate of 0.7 per cent for July.
REIWA president David Airey said it was unusual that the vacancy rate didn’t ease during the winter months which had traditionally been the case.
“The equilibrium for vacancy rates across Perth sits at around three per cent, so the current rate of just under two per cent is a third below where it would normally be,” Mr Airey said.
REIWA data show there are 2,440 rental properties currently on the market, down from a recent peak of 3,708 properties listed during the first week of July last year.
“As the number of rental properties diminish, rents are being pushed up. It’s a classic case of supply and demand being driven by population growth and weak investor activity,” Mr Airey said.
Mr Airey said the growth in rents across Perth was causing a higher than usual number of people breaking their lease to exit a property.
“I can’t see this rental situation changing in the short term, particularly given that the market tends to pick up in spring,” he continued. “The bottom line is that our population growth is higher than the rest of the country and everyone needs somewhere to live.
“Hopefully the strong first home buyer activity will see many current renters moving into a home of their own in coming months, freeing up rental stock and helping to ease the vacancy rate.
“We may also see investors return to the Perth market in greater numbers now that the rental yield has improved, house prices have stabilised, interest rates are steady and demand for accommodation is likely to continue for some time,” Mr Airey said.
Earlier last week, REIWA reported that, for the June Quarter, there had been a fall in the number of properties on the market along with an increase in land sales. Yet despite the increase in the number of sales, REIWA said the falling number of properties on the market is not being replenished by sellers listing new stock.
REIWA’s figures for the months of April, May and June show that turnover is up by 25 per cent when compared to the same period in 2011, with a projected 11,700 sales taking place in the quarter.
Mr Airey said the metropolitan median price was holding steady at $475,000, but the number of properties on the market had dropped to just 12,150 at the end of June and currently sits at around 11,000.
“This is well below the 14,300 properties we had on the market in March and sits below the equilibrium of around 12,000 listings, suggesting the market is swinging back to favour sellers,” he said.