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After three challenging years of tough market conditions, new REIWA data shows the Perth rental market has stabilised.
REIWA president Hayden Groves said the institute’s data for the December 2017 quarter indicates the Perth’s rental market bottomed out in 2017.
“After a prolonged period of falling rents, soaring listings, and record high vacancy rates, the market has strengthened,” he said.
“The December 2017 quarter results signal a stable market, which is welcome news for landlords and property investors,” said Groves.
Perth’s overall median rent price remained at $350 per week during the December 2017 quarter, the third consecutive quarter at that rate.
“Where rents were once declining every quarter, we’ve now observed nine months of steady prices,” Groves said.
Over the year, weekly median rent declined only $10.
This is a “significant improvement” on the previous year, when Perth’s weekly median rent declined $40 between the December 2016 quarter and the December 2015 quarter.
“Annually, the rate of decline has slowed considerably which is pleasing,”Groves said.
The reiwa.com data shows a number of suburbs saw increases in weekly rent over the December quarter.
The top five suburbs for median rent growth in the December 2017 quarter were:
There were 13,555 rental properties leased in the December 2017 quarter.
“Despite the traditional lull of the festive season, leasing activity only declined 1.6 per cent during the December 2017 quarter.
“It’s good to see that leasing activity held up well throughout the holiday season,” Groves said.
The suburbs with the biggest improvement in leasing activity volumes during the December 2017 quarter were:
There were 8,912 properties for rent in Perth at the end of the December 2017 quarter.
Groves said Perth rental listings have declined substantially since their peak of 11,300 in 2016.
“Listings have declined 8.4 per cent on a quarterly basis and are down 13.9 per cent compared to the December 2016 quarter,” he said.
Construction of new dwellings has slowed, and existing stock is being “soaked up” by the market, said Groves.
In addition, population growth in Western Australia rose to 0.84 per cent in the year to June 2017.
“New entrants into the state soak up rental stock first,” Groves said.
Average leasing days
It took 49 days on average to find a tenant in the December quarter, five fewer days than it took in the previous quarter.
Average leasing days were also down three days compared with same quarter for the previous year.
“Healthy leasing activity and declining listings has increased demand, which means tenants are needing to act faster to secure a rental,” said Groves.
“It also shows landlords are listening to the advice of their property managers and pricing their properties competitively from the start,” he added.
Vacancy rate at lowest in more than two years
Perth’s December 2017 quarter vacancy rate was 5.5 per cent, its lowest level since the September 2015 quarter.
The December rate compares with 6.9 per cent in the September 2017 quarter, and 6.4 per cent in the December 2016 quarter.
“Perth’s rental market has improved across the board in recent times which has had a very positive effect on the vacancy rate,” concluded Groves.
Sources The Real Estate Conversation dated 21 Feb 2018