The Perth rental markets vacancy rate has dropped to 1.6 per cent, which is the lowest it has been since March 2008.
REIWA President Damian Collins said a vacancy rate around three per cent is generally considered to create a good balance between supply and demand.
The vacancy rate has remained below three per cent for 21 consecutive months, which has ensured rents generally started to stabilise after the post mining boom downturn, Mr Collins said.
However, with it now sitting below two per cent, we are starting to see the impacts of limited stock, and it is only a matter of time before rents rise. In someareas,agents are reporting rents are already on the move up.
We are also seeing vacancy rates decline in the regions, with some areas experiencing a vacancy rate lower than Perth, such as Albany and Kalgoorlie which are now at 0.9 per cent.
Rental stock on reiwa.com
In July, there were 3,553 properties for rent on reiwa.com, which is 50 per cent less than what was available in July 2019 and it is creating competition amongst prospective tenants.
There are a number of factors that may have contributed to lowering the vacancy rate, such as the lack of new supply due to investors staying out of the market, expats returning back to WA, and investors selling their investment properties, Mr Collins said.
Rental searches on reiwa.com
According to reiwa.com data, there were 726,688 searches conducted for rental properties in WA during July demonstrating rental properties are in high demand, with Scarborough the top searched suburb (16,029 searches), followed by South Perth (12,341), Mandurah (11,901), Joondalup (11,792) and Subiaco (11,609).
Impacts of COVID-19
With the review of theResidential Tenancies (COVID-19 Response) Act 2020coming up, its vital that the government remove all restrictions and limitations fornon COVID-19affected tenants.
Investors are concerned about returning to the market due to the limitations on their ability to put rents to market and evict tenants who do not pay their rent. While wed prefer to see the legislation lapse in its entirety, if there is an extension, it must be for the very small number of tenants still affected, Mr Collins said.
If we dont encourage investors back into the market, then the rental shortage will only get worse.
