- Rental vacancy rates in WA are below 1% for fifth straight month
- REIWA is proposing two main courses of action for the next state government
- State elections will be held on 13 March
With West Australia’s rental stock below 1% for the fifth month running, the Real Estate Institute of WA (REIWA) has urged the next elected state government to do something.
In fact, with state elections due in a few weeks, REIWA is urging the newly elected government to do two things:
- Entice back investors, and
- Create a fairer rental system
“WA is currently the fastest-growing major market in the country. We are still one of the most affordable states, but urgently need more rental stock to keep it that way,” said REIWA President Damian Collins.
“It’s vital investors are encouraged back into the market, so more vacant properties are available for tenants. This rental shortage will not go away without a significant uplift in private investment in housing. REIWA is recommending two key actions to encourage investment in WA,” he said.
Short-term investor incentives
Investment activity in the state is described as “subdued” by REIWA.
With a ‘COVID moratorium’ on putting up rents or evicting tenants who cannot pay, rents have been held artificially low, and available stock has shrunk.
“REIWA is calling on all parties contesting the election to commit to short-term financial incentives for lessors to help make investing in WA property a desirable option,” Mr Collins said.
“For example, introducing land tax rebates for a limited time would make investment more financially viable and reduce the costs associated with owning an investment property.”
By way of example, for a property valued at $500,000, a two-year land tax rebate would save a typical investor $850.
“Other states are doing this, so there is no reason why WA, with a healthy budget surplus, shouldn’t be taking these steps to encourage investors back to the market,” he said.
“In the Northern Territory for example, there is no land tax payable on investment properties,” Mr Collins said.
Properties in WA compete for investors with properties in other states, he argued.
With the Residential Tenancies Act (RTA) currently under review, REIWA is also calling on all parties contesting the election to ensure tenancy laws are fair for all parties.
“The RTA … review provides an opportunity to ensure the legislation provides adequate safeguards for both lessors and tenants,” Mr Collins said.
REIWA has proposed seven key recommendations for this review which they feel will help keep residential tenancies in WA “fair and balanced.”
- Maintain the right to choose between a fixed or a periodic tenancy.
- Preserve a tenant’s and lessor’s right to end a periodic tenancy without grounds, if necessary.
- Encourage pets in rental properties without limiting a lessor’s right to determine the suitability of a property.
- Ensure compliance with current housing standards without creating additional red tape.
- Protect the interests of both tenants and lessors by requiring consent before any modification to the property is made.
- Resolve disputes quickly, fairly and efficiently.
- Maintain the current hardship provision for those seeking to break the lease.
“Introducing unfair tenancy laws that disproportionally disadvantage lessors would disincentivise property investment at a time when WA is crying out for more rental stock,” said Mr Collins.
“If investors are deterred from buying in WA, this will lead to the rental shortage worsening and higher rents for tenants.”
The state election is on Saturday 13 March.
Interactive Chart – courtesy of SQM Research. The author is a former employee of REIWA (2010-2013).