While the decline in the number of rental properties appears to have stabilised, local investors are still exiting the market
Perth's rental market continues to face tight conditions, with the vacancy rate remaining steady at 0.7% in October, according to data from the Real Estate Institute of Western Australia.
“The vacancy rate has been below 1% since August 2022, and shows no sign of changing in the short term,” said REIWA CEO Cath Hart. “The imbalance between supply and demand is the greatest factor affecting the rental market at the moment. While the decline in number of rental properties appears to have stabilised, it is not increasing. Local investors are still selling – and although eastern states investors are showing a lot of interest in our market, they seem to simply be replacing those who have left.”
Furthermore, the anticipated relief from building completions has not materialised as expected, Hart said. In the past three financial years, Western Australia has seen an average of 14,000 new dwellings per year, while the number of households has grown by approximately 60,000 during the same period. Delays in the building industry have also contributed to longer tenancies, affecting the market's usual turnover.
REIWA has been actively engaging with the Western Australian government, sharing market data, analysis, and insights from its members, in an effort to address the challenges in the rental market.
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“We are very pleased the WA government has recognised supply is the key issue facing the market and that strict legislative measures – such as rent caps and freezes – would have a negative effect,” Hart said. “As a result they’ve announced a range of measures to boost supply and aimed for balanced tenancy legislation,” she said.
Hart particularly welcomed the establishment of the Housing Supply Unit, which aims to enhance supply and affordability. She also commended the launch of the WA Rental Relief Program, designed to assist vulnerable tenants at risk of eviction due to arrears. The program also aims to support investors who may be facing financial stress due to those arrears.
Additionally, the government's incentive-based approach to the short-stay market was seen as a positive step, although it was acknowledged that this alone will not solve the current challenges.
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