According to the Real Estate Institute of Western Australia (REIWA), Perth’s vacancy rate is the best it’s ever been since July 2015 and has seen significant improvement over the second half of last year, benefitting landlords greatly.
REIWA president Hayden Groves said that the state’s current vacancy rate of 5.3 per cent is quite remarkable, considering that it was at 7.3 per cent — an all-time high — seven months ago.
“The vacancy rate is a good indicator for how the entire rental market is tracking, with reiwa.com data for February showing stable rent prices and declining listing levels. Leasing activity did drop off in February. However, levels are still healthy and trending above long-term averages,” Mr Groves said.
“After a challenging few years for landlords and investors, it’s pleasing to see some parity return to the rental market, with tenants and landlords seeing benefits simultaneously.”
Mr Groves attributed the lowered vacancy rate to multiple factors, the most important being increased population growth and a decreasing average tenure time.
“Population growth in WA has started to improve. Rental markets always feel the effects of population trends, with new entrants into the state the first to soak up rental stock,” the REIWA president said.
“Tenants are also moving more frequently. In 2014, for example, the average tenure time was 45 months; fast-forward to 2017 and it’s now 34 months, which is almost a full year less. This has led to an increase in leasing activity which has driven demand for rentals and had a positive effect on the vacancy rate.
“Another contributing factor is the reduction in the number of new dwelling commencements across the Perth Metro area. This has played an important role in lowering the vacancy rate. With less new dwellings coming onto the market, existing rental stock is now being soaked up, which is why rental listings have declined by 19 per cent over the last year.”