Rental listings in Perth have dropped to an eight-year low as consumers swoop in on empty stock, new research has revealed.
Numbers released by the Real Estate institute Western Australia (REIWA) show listings in September fell to 2,926, falling by 8 per cent over the month.
REIWA president Damian Collins said what started as a reasonable rental shortage has quickly changed to a severe rental shortage and they are now on the brink of a rental crisis.
“With Perth’s vacancy rate sitting at 1.3 per cent, it is no surprise that we are seeing listings for rent continue to lower. In addition, a number of our regional members are reporting vacancy rates close to zero, so the impact is being felt across the entire state,” Mr Collins said.
Leasing days were also notably faster in September, taking a median of 19 days to lease a property in Greater Perth, with the research stating it was the quickest time since June 2013.
While the median rental yield currently remains stable at $360 per week, suburbs in Greater Perth are showing positive growth signs in September, with Quinns Rock, North Perth, Dianella and Como the top performers.
The data also revealed four out of the top 10 suburbs experienced the highest increase in rental demand and had a median rent price at or above of $400 a week — Cottesloe, Innaloo, Piara Waters and Nedlands.
“With population growth returning closer to long-term average levels in Western Australia, the state government needs to encourage investment in property to accommodate returning expats and existing tenants,” Mr Collins said.
“There is the possibility we will run out of properties next year unless something is done to entice investors back and encourage first home buying in established areas.”
Perth residential sales market
While the rental market is often an early indicator that a market is starting to warm, CoreLogic’s latest home value index shows dwelling values in Perth increased by 0.2 of a percentage point in September.
“Darlington saw the biggest increase to its median in September with a 4.9 per cent increase, which was followed by Armadale (up by 4.7 per cent), Swan View (up by 4.5 per cent), Rockingham (up by 3.9 per cent) and Padbury (up by 3 per cent),” Mr Collins said.
“One in four suburbs experienced sales activity growth, with Seville Grove recording the biggest increase, followed by Dianella, Shoalwater, Wembley Downs and Leeming.”
Listings for sale were down by 20 per cent when compared with the same time last year; however, it was the fastest month for selling since May 2014, taking a median of 28 days compared with 55 days in September 2019.
“While it’s clear the WA property sector is in recovery mode with the worst behind us, we will have to deal with low levels of supply in the rental and sales market for some period of time,” Mr Collins said.
“In the upcoming WA budget, we are urging the state government to introduce at least a $7,000 grant on established homes for first home buyers which will help take pressure off the rental market.
“With prices on the rise, net migration at the highest level since March 2014 and record-low interest rates, there has not been a better time in many years for investors and home buyers to get into the market.”