After three years of challenging conditions in Perth’s rental market, conditions have stabilised and the outlook looks positive, new REIWA data shows.
REIWA president Hayden Groves said that results for the December 2017 quarter suggested that Perth’s rental market officially found its floor in 2017.
“After a prolonged period of falling rents, soaring listings and record high vacancy rates, the market has strengthened. The December 2017 quarter results signal a stable market, which is welcome news for landlords and property investors,” Mr Groves said.
Median rent price
Perth’s overall median rent price remained at $350 per week during the December 2017 quarter.
Mr Groves said that this was the third consecutive quarter Perth’s median rent price has held at $350 per week.
“Perth’s median rent stabilised considerably in 2017. Where rents were once declining every quarter, we’ve now observed nine months of steady prices,” Mr Groves said.
On an annual basis, reiwa.com data shows the median rent declined by $10 per week.
Mr Groves said: “Although there was a small decline between the December 2017 and December 2016 quarters, this is still a significant improvement on the year prior when Perth’s overall median rent declined by $40 per week between the December 2016 quarter and the December 2015 quarter. Annually, the rate of decline has slowed considerably, which is pleasing.”
While the overall median rent price is stable, reiwa.com data shows that a number of suburbs saw an improvement in rent prices over the quarter.
“The top five suburbs for median rent price growth in the December 2017 quarter were Mindarie ($565 per week), Attadale ($455 per week), Bicton ($370 per week), Shelley ($430 per week) and Shoalwater ($295 per week),” Mr Groves said.
There were 13,555 rental properties leased in the December 2017 quarter.
“Despite the traditional lull of the festive season, leasing activity only declined by 1.6 per cent during the December 2017 quarter. Tenants remain very active and it’s good to see that leasing activity held up well throughout the holiday season,” Mr Groves said.
Madeley, Kingsley, Inglewood, Piara Waters and Cooloongup had the biggest improvement in leasing activity volumes in the December 2017 quarter.
There were 8,912 properties for rent in Perth at the end of the December 2017 quarter.
Mr Groves said that rental listings in Perth have declined substantially since their peak of 11,300 in 2016.
“Listings have declined by 8.4 per cent on a quarterly basis and are down by 13.9 per cent compared to the December 2016 quarter.
“These considerable declines are likely due to new dwelling commencements slowing which has resulted in stock being soaked up. Another contributing factor is the improvement in population growth into the state, which lifted to 0.84 per cent in the year to June 2017. The rental market is generally the first place to feel the effect of population growth, as new entrants into the state soak up rental stock first.”
Average leasing days
It took 49 days on average to find a tenant in the December quarter, five days faster than it did in the September 2017 quarter.
Mr Groves said that average leasing days had also improved by three days compared to the December 2016 quarter.
“Healthy leasing activity and declining listings have increased demand, which means tenants are needing to act faster to secure a rental. It also shows landlords are listening to the advice of their property managers and pricing their properties competitively from the start,” Mr Groves said.
Perth’s December 2017 quarter vacancy rate is 5.5 per cent, the lowest level since the September 2015 quarter.
Perth’s vacancy rate is the lowest it has been in more than two years. It is now down from 6.9 per cent in the September 2017 quarter and from 6.4 per cent in the December 2016 quarter, which is significant,” Mr Groves said.
“Perth’s rental market has improved across the board in recent times, which has had a very positive effect on the vacancy rate.”