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Rents in Perth are set to keep rising in the year ahead, in general due to a modest supply and high levels of demand, one expert has said.
Shane Kempton, chief operations officer for Professional Real Estate Group in Western Australia and the Northern Territory, said that this rise stems from high levels of demand, particularly for established family homes, with the number of vacant rental properties falling by 3,000 dwellings over the last two years.
Mr Kempton has noticed that these family homes are being leased between seven and 14 days of becoming vacant.
“The days of tenants negotiating rents down or demanding extra free services such as lawn mowing for these homes are now truly over in these areas,” the chief operations officer said.
“Over 2018, we expect this wave of rental demand to spread across the overall Perth rental market as demand for rental properties starts to outstrip supply.
“The rental market bottomed in Perth mid last year, with no noticeable declines in weekly rents being recorded since this.”
Mr Kempton and Professional predict weekly rents to rise throughout 2018, with the rise set to accelerate.
“For investors, the positive turnaround in the rental market during 2018 should encourage them to buy property in Perth as rental yields will improve,” Mr Kempton said.
“The improvement in the rental market is generally a precursor to an upswing in the real estate sales... investors can also expect rising property values in Perth over the next two to three years as the demand for housing outstrips supply.”
Two main reasons why Perth’s rental market is experiencing improved conditions stem from the state economy benefitting from an increase of close to 50,000 new jobs and only modest levels of housing construction, which would both funnel into a state of low supply and high demand.
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