Perth’s vacancy rate tightens

Perth’s vacancy rate dropped to 0.7 per cent in September, a decline of 0.1 percentage points from August.

“After rising to 0.9 per cent in July, the vacancy rate has been declining again,” REIWA CEO Cath Hart said.

“Long term trends show rental listings tend to decline in the lead up to the end of the year, so the vacancy rate is likely to remain low in the coming months.

“It dropped to a record low of 0.6 per cent last December and the data suggests that’s very possible again.”

Ms Hart said the tight conditions in Perth’s rental market were being driven by low supply and strong demand.

“WA’s strong population growth is maintaining demand for rental properties and the ongoing delays in the building industry are keeping people in their rental properties longer, impacting the usual turnover of the market,” she said.

“While we continue to see strong interest from Eastern States investors and the decline in the number of rental properties in the market appears to have stabilised, demand continues to exceed supply. It’s a problem that’s been years in the making and won’t be solved overnight.”

Ms Hart said the tight rental market highlighted the need for a consistent pipeline of new homes as well as a legislative environment that supported investment.

“Investors are facing a number of challenges, including the rising costs of mortgages, insurances and council rates. Legislation is one more factor for them to consider,” she said.

“A prime example is the COVID moratorium. When that ended, investors voted with their feet and there was a mass exodus from the market.

“The finer details of the changes to the Residential Tenancies Act are still to be decided. While investors have been reassured by the retention of no grounds terminations and the State Government ruling out rent caps and freezes, they are still concerned by the potential changes regarding pets and modifications to rental properties.

“Our rental market relies heavily on private investors and decision makers need to keep this in mind. We can’t afford to lose more rental properties.”