Tenants very active in Perth rental market as leasing levels rise
29th June, 2017
Although Perth’s rental market has faced its share of challenges in recent times, positive signs are emerging with listing stock beginning 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.
Leasing activity levels spike in May 2017
New reiwa.com 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 4,900. REIWA analysis shows Perth has never experienced leasing figures this high before. Prior to the last few months of elevated levels, the only time leasing numbers came close to 4,900 was in 2013 when 4,223 properties were leased in December – some 700 fewer than in May 2017.
The impact of listing levels
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 at around 4,500, a figure commensurate with long-term average levels and significantly less than the 10,000-plus stock levels experienced today.
Market challenges for investors
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 currently 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.
Source: 24 June 2017
Author: REIWA President Hayden Groves