October Update 2022
As you may have heard through different channels of media, or perhaps personal experience as a landlord or tenant yourself, there is a shortage of rental properties in Perth. This has caused what is being labelled as a ‘rental crisis’. So how did we get here?
When Covid hit, a number of Perth Expats decided to return from Overseas and over East with many of them moving back into their property which had previously been rented. Additionally, the recovery in house and unit prices have encouraged many landlords to sell their investment property. Some landlords have held onto their investment for 10+ years waiting for the perfect time to sell. In the Greater Perth Region, REIWA recorded in 2020 that there were 31,397 houses and units sold – the latest data for September 2022 has recorded 45,878 houses and units sold and we haven’t even finished the year yet! That’s 14,481 more properties being sold this year compared to 2020.
The data also provided by REIWA regarding leasing activity in the Greater Perth Region has the opposite pattern. In 2020 the leasing numbers were 48,065, and now in 2022 the numbers are only 33,915. In addition to this, DMIRS has reported that the number of Bonds held with Bond Admin has significantly dropped by 16,464 since January 2021. This indicates that there are 16,464 less properties being rented now than there was at the start of 2021. This supports the fact that a majority of the sales listings are being sold to owner occupiers and are therefore no longer on the rental market.
This is why Perth currently has a rental shortage. So, what can we do?
To fix this issue, we need more rental properties coming into the market to keep up with the high demand Perth is experiencing. If only it were that simple! Unfortunately, the delay with build times has meant Perth developers cannot build fast enough to keep up with the demand. Therefore, we are encouraging buyers to consider investing in Perth and in the current market, why wouldn’t you want to? Perth is still one of the cheapest capital cities to live in, in Australia, and is achieving a great rental return because of the current situation we have at hand.
Celsius has recently developed 8 villas in East Victoria Park as a Joint Venture with Rocky Bay and had the opportunity to rent 4 of these and the rental return for these properties was considerably higher than anticipated. For example, we estimated a weekly rent amount of $500pw for the 3×2 villas and we saw applicants offering between $550pw and $650pw! Keep in mind, these villas are brand new and in a great location but there are many suburbs in the Perth Region that are also seeing record high rents and very good rental yields due to comparatively affordable sale prices.
As a property manager, I see firsthand how difficult and stressful it is for tenants to find a property to live in. In the last 30 days alone, we have processed 65 applications and only had 10 properties to lease. The demand for rental properties is there and if you are looking to purchase an investment property in Perth, now is the time!
Warm Regards,