Market for rentals looks more positive
Although Perth’s rental market has faced its share of challenges in recent times, positive signs are emerging with listing stock starting to level out and the median rent price starting to steady.
Additionally, there has been a notable increase in the number of rental properties being tenanted, with leasing activity rising at significant rates.
New REIWA data shows there was a 32 per cent increase in the number of properties leased in Perth between April and May.
Naturally, the Easter and Anzac Day breaks can attribute to a proportion of this rebound in activity, although most compelling is that leasing activity in Perth in May 2017 was 17 per cent higher than it was in May 2016.
The volume of properties leased in May exceeded 4900.
REIWA analysis shows Perth has never experienced leasing figures this high before.
Prior to the past few months of elevated levels, the only time leasing numbers came close to 4900 was in 2013 when 4223 properties were leased in December — 700 fewer than in May 2017.
So if there are more tenants leasing properties than ever before, why is the market still challenging for investors?
In short, it’s because of the quantity of rental stock available. The difference between the Perth rental market in 2017 versus 2013 is there are more properties available for rent now than there were back then. Five years ago, listings for rent were about 4500, a figure commensurate with long-term average levels, significantly less than the 10,000-plus stock levels experienced today.
Elevated stock levels mean Perth tenants have plenty of choice available to them, naturally increasing the competition between landlords to secure a tenant, hence the lower rent prices.
It also means those searching for a rental have the luxury to take their time to view a greater range of properties to ensure they find one that meets all their needs. Landlords and prospective investors should not be discouraged though.
There is very good opportunity in Perth’s current rental market. In fact, you could argue it’s an extremely good time to invest in WA property, given the historically low interest rate levels available and more affordable property prices.
Investors would be smart to take advantage of these favourable buying conditions before the market invariably turns again.
If you own a rental property, you have a very good chance of securing one of the many tenants out there looking for a home — provided you list competitively. Speak with your REIWA property manager about what you can do to ensure your home stands out.