Now, near-zero vacancy levels are showing promise of future growth in rental returns, and a breakthrough in a coronavirus vaccine sends investor sentiment on an upward trajectory.
REIWA September quarter rental market data delivered a vacancy rate of 0.9% against 2% vacancy at the end of June, and 2.5% a year ago. On 1 November, there were 2,784 properties listed for rent compared to 5,904 on the same date in 2019 – less than half the number of properties available.
Nicole Hazell, Property Management Divisional Leader at Realmark Urban commented on Perth’s current rental price movement in light of the boom-time vacancy figures.
“You would expect with such low vacancy rates, rents would be on the rise with increased competition among tenants. However, as you may personally be experiencing, the Emergency Relief Period legislation is restricting landlords from increasing rents while their existing tenants are occupying the property.
“Here at Realmark, we continue to see rent increases when there is a changeover in tenancy, in many cases more than 10 per cent more than the previous rent. This consistent trend has been in line with REIWA’s findings through its recent rental data,” said Nicole.
“Due to lack of rental supply and the security provided by the temporary legislation, tenants are choosing to stay where they are for the moment as a pragmatic and safe choice until March 2021 – where they may have to make the decision to downsize or pay more for their current property.”
Assuming the Moratorium is lifted in March 2021, there’s been projections that this may trigger a jump in rents of up to 20 per cent, with 12 months of pent-up movement and a number of landlords returning to WA and moving into their own properties.
A number of factors continue to contribute to signs of a tight rental market. While we expect a number of tenants to move into their own homes once built as a result of government grants, this is likely to be offset by people returning to Perth now that our hard border has opened, combined with organic growth in our population and through WA’s performing mining sectors.
The flow-on effect of a buoyant rental market is the potential growth of property prices, with increasing demand from renters looking to buy, interstate migrators and immigrants looking to purchase property in favour of renting.
Many analysts predict that Perth is expected to outperform all other capital cities over the next three years and presents as an attractive offer to investors looking to secure a positively geared property with healthy capital gain prospects.
If you’re looking to acquire additional property at this time, Realmark Urban urges you to contact us on 08 9388 3911 for a discussion.
The above is general in nature and is not intended to be financial or investment advice, please seek advice specific to your circumstances.