Rent rises likely following strong March quarter according to Knight Frank

Stock image.
Stock image.

PERTH’S rental market saw greater leasing activity, more competition and increasing rents in the first quarter of 2019 according to Knight Frank’s latest Residential Local View report.

The company’s property management team recorded a 131 per cent increase in signed residential rental agreements compared to the same time last year.

Head of residential property management WA Tom Berry said the number of people attending property inspections had also risen, with most people less complacent now the market was strengthening.

“We’re witnessing quicker turnaround times for the submission of applications, with some starting to miss out on their first choice,” he said.

“The first rent increases are coming through now and a few of our tenants are considering whether now is the time they should buy their first home – all trends we haven’t seen for some time.”

The report showed a greater number of people moved from interstate and rented in Perth, up from 14 per cent of all leases in the first quarter of 2018 to 19 per cent of all leases in the March quarter 2019.

Tenants signing new leases worked in two main sectors – resources ( up from 17 per cent in the March quarter 2018 to 31 per cent in the March quarter 2019) and finance (up from 10 per cent to 13 per cent over the same period).

“The local-based market is still moving about, which is great for stability, but in the past quarter we have witnessed a stark increase in those moving from interstate,” Mr Berry said.

“With business confidence building, and office vacancy tightening in the CBD, there has been a noticeable increase in the number of tenants working in the finance sector who have signed tenancy agreements.

“There’s a clear sign of activity picking up in the resources sector again, as relocation agents are very much in the market.”

The type of property in demand varied depending on the location.

Mr Berry said tenants were choosing furnished apartments in inner-city suburbs, however in the suburbs the demand was for family homes.

According to Knight Frank Research, residential rents across Greater Perth increased 3.4 per cent over the year to March 2019.

RELATED: Rental market improves: REIWA

Head of residential research, Australia Michelle Ciesielski said the Perth rental market continued to recover, with Reiwa reporting a vacancy rate of 2.6 per cent in January 2019, down significantly from the height of 7.6 per cent in July 2017.

“Given this vacancy falls below the equilibrium of 3 per cent, the Perth market is extremely close to being considered undersupplied for rental properties,” Ms Ciesielski.

“As the resources sector continues to gather momentum, this will once again have a positive impact on the rental market.

“Further increases in rents as stock levels reduce are certainly on the cards over the next six months.”

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