An increase in rental stock in Perth is forcing landlords to lower their rents to meet the change in conditions.
According to deputy president of the Real Estate Institute of Western Australia (REIWA) Hayden Groves, the vacancy rate had lifted from a tight 1.9 per cent at the end of last year to around 3.1 per cent in September, with current listings sitting at 3,850 dwellings.
“This is 80 per cent more stock than the same time last year and much of it is being driven by tenants leaving their rental to buy a home of their own,” Mr Groves said.
REIWA data shows the overall median rent dropped by $5 to $470 per week. However, results were patchy across Perth and some falls were greater than others.
“Median rents have come down by $10 per week in the Bayswater and Bassendean areas, $15 in Fremantle, $22 in Melville, $30 in the City of Perth, $25 through South Perth and Victoria Park, $20 in Vincent, $25 across the western suburbs, $23 in Mundaring, $20 in north west Wanneroo, $10 through north east and southern Wanneroo, $10 in Cockburn and also $10 in Rockingham,” Mr Groves said.
“Typically, people are now paying around $475 for a house, down by $5 on the June quarter, or $450 for a flat, unit, apartment or villa, which is down by $10.”
Mr Groves said around 65 per cent of vacant rental properties were broadly within a 10 kilometre radius of the CBD and that this central region of Perth had experienced a decrease in rental listings during the September quarter.
“Despite this overall fall in the number of available rental homes, some sub-markets such as Bassendean-Bayswater, Belmont and South Perth-Victoria Park saw increases of between 5 and 16 per cent for the quarter," he said.
“Meanwhile, in the eastern part of the City of Stirling, places like Joondanna, Yokine and Tuart Hill saw an increase of listings of around five per cent."
Mr Groves cautioned tenants against breaking their fixed-term lease to find a better or cheaper property in the current market, saying costs associated with breaking a lease could outweigh the benefits.
“Tenants should talk with their property manager if they are thinking of a break-lease and do the sums before making a decision," he said.
“Equally, it’s important for owners to understand that conditions have changed and they need to adjust their expectations of rental return by talking to their property manager to set the right price."