- Vacancy rates in Perth's rental market rose for the first time in six months, to 0.9%.
- The last time Perth's market was balanced was in September 2019.
- It is too early to tell if Perth is heading toward a balanced market anytime soon.
Renting in Perth has just become slightly easier, as vacancy rates rose. It is the first time the rate has moved up in six months, however, the shift is marginal, now sitting at 0.9% for July.
REIWA CEO Cath Hart says Perth has seen a long period of extremely low vacancy rates, sitting below 1% for 23 out of the past 36 months.
“This month’s result is a move in the right direction, but it is still very low and vacancies are still filling quickly,” she said.
What does an ideal rental market look like?
A balanced market is considered by REIWA to have a vacancy rate of between 2.5% to 3.5%; the last time it was 2.5% was in September 2019.
“[Vacancy rates] dropped to a 42-year low of 0.6% in December 2022 and has been 0.7% for the first six months of 2023,” Hart said.
She added that the market has been experiencing particularly challenging conditions in the past few years, with a significant number of investors leaving the market.
“In addition, delays in the building industry have disrupted the natural turnover of the market, forcing tenants who were building a home to remain in their rental properties for longer than originally intended.”
Supply beginning to grow
Despite the delays, more tenants have been moving into their new homes, and this has freed up some supply, according to Hart.
“They are also seeing strong interest from Eastern States investors who see value in Perth prices and strong rental yields. This is slowly adding to supply as well.”
Hart also observed larger legislative certainty, following the State Government announcement on the Residential Tenancies Act in May, which has also supported investor confidence.
A sign of change?
Arena Real Estate Agents partner and sales associate, Brad Triplett, says with such a slight increase from a low number, it is much too early to call if this is the beginning of a trend towards a balanced market.
Furthermore, Triplett says he has been receiving more inquiries from international students – more than he has in a decade.
“I wouldn’t be surprised if that also impacted the rental market,” added Triplett.
Blackburne senior property manager, Tiana Bignell, agreed, saying in her opinion, this is not quite a sign of change to come.
“The middle of the year, the winter months, are the quietest time in the rental market,” she said.
“Properties stay on the market a touch longer but by October this will change.”
Hart offered a different take, and says there are early indications the market is easing.
“We expect the vacancy rate to soften further towards the end of the year, with more building completions and as more investors enter the market,” she said.
“The changes are expected to be gradual, and it will take time for people looking for a rental to really feel a difference.”
