An Update on Perth’s Rental Market
Perth’s rental market has been in the media multiple times over the last year due to the high demand we have seen post COVID and the current housing crisis. It was January 2021 when the rental prices started to increase, median days on market started to decrease, and Perth’s vacancy rate dropped to an all-time low of under 1%.
As of September 2024, REIWA has recorded its vacancy rate at 1.4% which is still well under the balanced vacancy rate of 2.5 – 3.5%.
Over this time, according to REIWA’s statistics, the median rental prices for houses increased from $410pw to $650pw and unit prices had risen from $370pw to $600pw.
What are our Celsius Property Managers experiencing in the current market?
There is still plenty of demand for rental properties in Perth and we have even noticed an increase in demand for furnished properties in great locations.
Recent experience shows that when we advertise a home open, we find that half of the registered prospects actually attend. Following this, only half of the attendees apply for the property.
We have seen less applicants voluntarily make an offer above the asking price, or if they do, it is only a small amount. We are hopeful that the market is slowly stabilizing, however, without a solution to the housing crisis, we don’t foresee rental prices decreasing any time soon. We still receive multiple applications on available rental properties and generally, an approved tenant is needing to move into the property within a week. Therefore, we are working with shorter time frames and vacancy gaps than what we were previously which is great for landlords and tenants
What about properties that are currently tenanted?
When a tenant’s lease is due to expire, it is crucial that the Property Manager is touching base with the landlord (with plenty of time) and providing an updated market analysis. This analysis should include comparable properties as well as an estimated rental price for consideration. However, it’s important to weigh up the costs of keeping the current tenant (perhaps at a slightly smaller increase) or increase the rental price to the max value and potentially losing a great tenant.
Are Investors coming back to Perth?
We hope so! The Perth rental market lost a lot of rental properties to owner occupiers over the last 2 years, and we are slowly starting to see more properties come to the market, which is great! According to REIWA, there are currently 1955 properties available to rent (as of this week) and in October 2023 there were 1708 available to rent. That’s almost 250 more properties available, however, Perth still needs more rental properties to bring the vacancy rate back up to its ideal range and for rents to stabilize more.
We saw the WA Government implement the STRA Incentive Scheme which offered short-term accommodation homeowners $10,000 to convert their property to a long-term rental. This Scheme is due to expire on November 8th so there is not much time left at all.
Therefore, if you are looking to rent your current property, purchase an investment, or convert from short-term to long term – please feel free to reach out to Celsius and we would be happy to assist you on this journey!