In a blow for Perth renters, the vacancy rate has fallen again, after only recently showing signs of improvement.
According to the Real Estate Institute of Western Australia (REIWA), Perth’s vacancy rate dropped to 0.7 per cent in September, a decline of 0.1 percentage points from August.
REIWA Chief Executive Officer Cath Hart said after rising to 0.9 per cent in July, the vacancy rate has been declining again.
“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,” Ms Hart said.
“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 state 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,” she said.
“Legislation is one more factor for them to consider.”
According to Ms Hart, the Covid moratorium was a prime example of the types of policies that forced investors out of the market.
“When that ended, investors voted with their feet and there was a mass exodus from the market,” she said.
She said with the finer details of the changes to the Residential Tenancies Act still to be decided, investors are remaining cautious.
“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,” she said.
“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.”