Perth’s rental vacancy rate drops to lowest level in more than five years

Stock image.
Stock image.

PERTH’S rental vacancy rate is the lowest it has been in more than five years, according to REIWA.

It dropped to 2.8 per cent in the December quarter 2018 from 3.8 per cent in the previous quarter.

President Damian Collins said the last time the vacancy rate was that low was March 2013.

“The rapid improvement we’ve observed in the last 18 months is impressive, especially considering the vacancy rate peaked at 7.3 per cent in June 2017 – the highest it’s ever been,” he said.

“Now that the vacancy rate is below 3 per cent, we can safely say the market is in a recovery phase with landlords now the beneficiary of the current rental environment.”

Perth’s overall median rent remained at $350 per week for the seventh consecutive quarter, the longest stretch of stable rents since reiwa.com started collecting rental data in 2001.

Despite the overall median remaining steady, there were 105 suburbs that recorded an increase in price, with North Coogee, Churchlands, Ardross, Daglish and Munster the top performers.

“When we drill down further and isolate houses and units, the results of the December quarter are very pleasing for landlords, with both houses and units experiencing increases in rents,” Mr Collins said.

“The median house rent increased $10 per week to $360 while the median unit rent increased $5 per week to $325.

“This improvement didn’t translate into an increase in the overall median as there were more units leased during the quarter than houses, which has kept the overall median stable.

“If the rental market continues on its current trajectory, we should see Perth’s overall median rent price increase in 2019.”

There were 12,917 properties leased in Perth during the December quarter, slightly below the September quarter figure of 13,234.

Mr Collins said the decline was common over the festive season, with activity tending to decline in December before increasing again early in the new year.

The five suburbs to experience the biggest increase in leasing activity (percentage wise) were Kallaroo, Daglish, Melville, Merriwa and Hilton, while the suburbs with the highest volume of leased properties were Perth, East Perth, Scarborough, Baldivis and Maylands.

The average time to lease a property was 44 days, down from 48 days in the September quarter and 50 days in the December quarter 2017.

At the end of the quarter there were 6865 properties for rent in Perth.

“Listings continue to reduce, with the December quarter figure down 10 per cent on the September quarter and a substantial 27 per cent on the same time last year,” Mr Collins said.

“The sharp decline in listings is a driving force behind why Perth’s vacancy rate has improved.

“With population growth in WA on the incline and fewer new-building projects commencing, listing stock is being absorbed more quickly.”

With the vacancy rate falling and REIWA members reporting a significant increase in the volume of enquiries for rentals in January Mr Collins said the signs for 2019 were promising.

“The rapidly improving rental landscape combined with Perth’s favourable buying environment should hopefully see more investors enticed back to the market,” he said.