PERTH’S rental market has finally stabilised after three years of challenging conditions, with a number of suburbs also recording an improvement.
REIWA president Hayden Groves said the results for the December 2017 quarter suggested Perth’s rental market officially found its floor in 2017.
“After a prolonged period of falling rents, soaring listings and record-high vacancy rates, the market has strengthened,” he said.
“The December 2017 quarter results signal a stable market, which is welcome news for landlords and property investors.”
The top five suburbs for median rent price growth in the period were Mindarie ($565 per week), Attadale ($455 per week), Bicton ($370 per week), Shelley ($430 per week) and Shoalwater ($295 per week).
Harcourts Alliance senior property manager Candice Dowling said Mindarie was attractive to families in particular and for good reason.
“It is even more accessible now with the Mitchell Freeway extension, and is walking distance to the beach, shops and the several local schools,” she said.
“Mindarie offers an affordable coastal atmosphere in the Perth metropolitan and we believe this is what attracts tenants to this popular suburb.”
Median rent price
Perth’s overall median rent also steadied considerably in 2017, with the December 2017 figures marking the third consecutive quarter the median rent has held at $350 per week.
“Where rents were once declining every quarter, we’ve now observed nine months of steady prices,” Mr Groves said.
On an annual basis, the data showed the median rent declined $10 per week.
“Although there was a small decline between the December 2017 and December 2016 quarters, this is still a significant improvement on the year prior when Perth’s overall median rent declined $40 per week between the December 2016 quarter and the December 2015 quarter,” Mr Groves said.
“Annually, the rate of decline has slowed considerably, which is pleasing.”
In the December 2017 quarter, 13,555 properties were leased – a decline of 1.6 per cent.
“Despite the traditional lull of the festive season, tenants remain very active and it’s good to see leasing activity hold up well throughout the holiday season,” Mr Groves said.
Madeley, Kingsley, Inglewood, Piara Waters and Cooloongup had the biggest improvement in leasing activity volumes during the period.
There were 8912 properties available to rent in Perth at the end of the December 2017 quarter, a substantial decline since listings reached a peak of 11,300 in 2016.
“Listings have declined 8.4 per cent on a quarterly basis and are down 13.9 per cent compared to the December 2016 quarter,” Mr Groves said.
“These considerable declines are likely due to new dwelling commencements slowing, which has resulted in stock being soaked up.”
Mr Groves said another contributing factor was the improvement of population growth in the state, which lifted to 0.84 per cent in the year to June 2017.
“The rental market is generally the first place to feel the effect of population growth as new entrants into the state soak up rental stock first,” he said.
Average leasing days
It took 49 days on average to find a tenant in the December 2017 quarter – five days faster than it did in the previous quarter.
Average leasing days had also improved by three days compared to the same period 12 months before.
“Healthy leasing activity and declining listings has increased demand, which means tenants are needing to act faster to secure a rental,” Mr Groves said.
“It also shows landlords are listening to the advice of their property managers and pricing their properties competitively from the start.”
Perth’s December 2017 quarter vacancy rate is 5.5 per cent, which is the lowest level in more than two years.
“It is now down from 6.9 per cent in the September 2017 quarter and from 6.4 per cent in the December 2016 quarter, which is significant,” Mr Groves said.
“Perth’s rental market has improved across the board in recent times, which has had a very positive effect on the vacancy rate.”