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A Perth-based real estate group has suggested the city’s property market is on the way to recovery following an increase in leasing activity.
The Peard Real Estate group recently recorded a 10 per cent rise in leasing activity in Perth over the first two months of 2017, from the same period in 2016.
The group’s CEO, Peter Peard, said this rise was due in part to a combination of competitive rents and tighter lending restrictions which had encouraged more people to rent.
“Rents in Perth have fallen to rock bottom levels during 2016 and landlords had to slash rents accordingly [but] there are now positive signs that the worst is over for Perth landlords due to this greater leasing activity,” Mr Peard said.
“All of the Peard offices that stretch from Mindarie in the north to Mandurah in the south have recorded increasing levels of rental inquires and leasing activity.”
Mr Peard said the rising levels of properties being leased was an indication that the overall property market in Perth had reached the bottom of its current cycle and would soon see an “upward trajectory" of recovery.
However, he warned investors to remain competitive, advising against raising rents until the local vacancy for their individual areas fell below 3 per cent, the “tipping point” for undersupply.
“Over the remainder of 2017, we should gradually see the rental vacancy rate fall in Perth once the oversupply of rental properties has been absorbed,” Mr Peard said.
The CEO said that with the current improvements in commodity prices, consumer confidence in the state should start to strengthen, which would lead to an increase in property sales.
“We should also see increased buyer activity from eastern states’ property investors during the coming year [as] Perth is now the third largest capital city in Australia after Sydney and Melbourne, with property prices in Perth now substantially below these two larger cities.”
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