- Represents the largest one-month increase since April 2020
- The rental market is still tight, and well under a 'balanced' market of 2-3%
- There are sign of some investors returning to the market, argues REIWA President
The vacancy rate for Perth has increased to 1.2% for June 2021 – the highest level seen since August last year.
Along with being the highest rate in ten months, it is also the largest one-month increase since April 2020.
“While we are still a way off the two to three per cent figure required for a ‘balanced market’, the improvements observed since the end of the rental moratorium are encouraging and suggest there is light at the end of the tunnel,” said REIWA President, Damian Collins.
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Listings and investor confidence rising
Data from reiwa.com show that listings for rent have increased by 5.7% since the end of March. Balga is up 108% followed by 90% for Highgate.
Mr Collins argued the increase in listings is a sign of investor confidence returning given the end of the moratorium in March.
“This is also backed up by the latest Australian Bureau of Statistics data which shows investor loan approvals in Western Australia increased to $498 million in May 2021, which is 10 per cent more than April 2021 and 209 per cent more than May 2020,” Mr Collins said.
“The past few years have been incredibly challenging for the WA rental market and during the downturn, a lot of property investors were impacted. This was further exacerbated during COVID-19 when legislative controls, like the rental moratorium and rent freezes, were introduced.”
Damian Collins, REIWA President
Mr Collins added that these measures hurt the rental market “a lot more than they have helped” resulting in investors fleeing the market, thus causing a rental shortage.
He expects as the year progresses that more rental properties will become available due to a mixture of investors returning and tenants take advantage of affordable house prices to become first home buyers.
“However, this will not happen if investors are further deterred from buying property in WA,” he warned.
Proposed RTA changes will hurt rental market
Mr Collins concluded his remarks by stating that the review of the Residential Tenancies Act (RTA) could be seen as a threat to the WA rental market.
While there are improvements in Perth, multiple regional areas such as Albany, Broome, Bunbury, Esperance and Karratha are still suffering from sub-1 % vacancy rates.
“If the outcome of the review is that the RTA is made more onerous for property owners, investors will exit the market in large numbers again, causing stock levels to plummet and rents to soar.
“With positive trends starting to emerge in the rental market, now is not the time to be making significant changes to the RTA,” he said.