Rents: the only way is up

Perth’s median rent prices hit new highs in August.

After sitting at $550 per week since March, the median dwelling rent rose to $575, reflecting the ongoing changes in both the median house and unit rents. They increased to $600 and $550 per week respectively.

REIWA CEO Cath Hart said market conditions indicated more increases are likely.

“Strong demand is maintaining pressure on the market, with rental listings falling below 1,700 at the end of the month,” she said.

“They dropped below 1,500 for the two weeks around Christmas and New Year, but other than that they are at their lowest levels for over a decade.

“While members are reporting a lot of activity from Eastern States buyers and builders are reporting increasing completions, supply can’t keep up with demand.

“Unfortunately, the green shoots we saw in the last two months didn’t bear fruit and under current conditions we expect the vacancy rate to tighten towards the end of the year.”

According to www.reiwa.com, the suburbs that saw the most growth in their median rent price in August were Erskine (up 47 per cent to $515 per week), North Fremantle (up 38 per cent to $900), Lathlain (up 32 per cent to $600), Quinns Rocks (up 31 per cent to $700), and Joondanna (up 29 per cent to $600).

Listings for rent

There were 1,673 properties available for rent on www.reiwa.com at the end of August, a 10.2 per cent decrease from July and 12.2 per cent lower than August 2022.

“In the past few years we have seen rental listings decline in the latter part of the year, so trends suggest the market will tighten towards Christmas,” Ms Hart said.

“Supply is the major issue facing the market. The big lesson out of the past decade is how important it is that WA maintains its long-term average of 22,000 new home builds per year. We have lifted in the past few years, but this is coming off a low point after only building about 13,000 homes in 2019.

“There is also concern about the number of new builds in the apartment market. The average is 14 new builds per year, adding about 1400 apartments to supply. This year though there have been only two new starts for about 140 apartments. This will have repercussions in the next few years.

“It has been very heartening to see the State and Federal Governments recognise supply is the issue and work to address some of these problems, even though it will be a long-term solution.”

Median leasing times

It took a median of 15 days to lease a rental during August, one day faster than July.

www.reiwa.com data showed the suburbs recording the fastest median leasing times were Erskine (four days); Willetton and Coolbellup (eight days); Maddington, Girrawheen, Innaloo, and Wembley (nine days); and Highgate, Tuart Hill, and Kewdale (10 days).

Perth sales market

Perth’s median house price rose to $562,550 while unit prices remained steady at $400,000.

“The underlying trends suggest we can expect further growth over the rest of the year,” Ms Hart said.

“The good news for prospective buyers is that the rate of growth is slowing.”

According to www.reiwa.com, the top performing suburbs for house price growth in August were Wannanup (up 4.1 per cent to $619,000), Swan View (up 2.2 per cent to $460,000), Nedlands (up 2 per cent to $2,000,000), Warnbro (up 1.8 per cent to $460,000), and Craigie (up 1.8 per cent to $580,000).

North Perth, Brabham, Balcatta, Hilbert and Bertram also recorded over 1.5 per cent.

CoreLogic home value index

CoreLogic’s Perth home value index increased 0.9 per cent in August and 2.9 per cent over the past three months.

Perth, Adelaide and Sydney are the only capitals to show growth over the past year, with Perth recording the highest increase at 4.5 per cent.

Listings for sale

The number of properties available for sale in Perth was 5,170 at the end of August. This was 1 per cent higher than July, but 36.8 per cent lower than 12 months ago.

Ms Hart said properties were still selling incredibly quickly, which was keeping the number of listings on www.reiwa.com low.

“We are seeing properties come onto the market in reasonable numbers, but demand is high, buyers are active and anything new is snapped up quickly, in a matter of days in a number of suburbs,” she said.

“Greenfields is one of those suburbs. Members say this area is in very high demand, particularly from Eastern States investors. It’s an older area, relatively affordable, has family homes on good-sized blocks and offers good rental yields.

“Buyers are essentially on waiting lists and when a home becomes available it is sold.

“It must be noted that this activity and growth isn’t sustainable, but it reflects the heat in the market at the moment.”

Time on market

It took a median of 10 days to sell a house in August, unchanged from July and eight days faster than a year ago.

While houses have been turning over quickly for some time, Ms Hart said it was interesting to see the increase in the speed of unit sales.

“Units sold in a median 16 days in August. The median selling time was over 20 days earlier this year and 35 days a year ago,” she said.

“While houses remain very popular, units are absorbing some of the demand.

“They can be quite affordable options, particularly for people seeking to be in the heart of popular lifestyle precincts or close to the city.

“They also offer good rental yields and are of interest to investors.”

www.reiwa.com data showed the fastest selling suburbs for houses were Greenfields, Armadale, Banksia Grove and Cooloongup (five days); Bertram, Clarkson, Butler, Marangaroo, Padbury and Parmelia (six days).

The fastest selling suburbs for units were Balga (six days); Como and Palmyra (seven days); Nollamara (nine days); Tuart Hill (11 days); Balcatta, Innaloo and West Perth (12 days); and Rivervale and Maylands (13 days).