Perth rents rise to $420 weekly median but no rental crisis looming: REIWA
Perth rents are expected to keep rising as vacancy rates remain low and tenants face increased competition for houses, according to the Real Estate Institute of Western Australia.
Median rents have increased to $420 a week during the March quarter, up 10% from the same time last year, REIWA figures show, but there are reports of many potential tenants offering $50 to $100 more a week to secure a lease.
Earlier this year callers to ABC radio's 720 morning program told of 30 to 40 people turning up to open homes only to find out later the successful applicant had offered significantly more than the advertised price.
REIWA President David Airey told the ABC that while it's not illegal and landlords are unlikely to reject the extra money, it's not a practice he encourages.
Managing director of Stockland Matthew Quinn says suburban Perth had once been one of the softer rental markets in Australia but vacancy rates in Stockland projects there have fallen to less than 1%.
"Rents are going through the roof, just ask anybody who's tried to rent a house in Perth in the last six months – it is a nightmare," says Quinn.
Quinn predicts the housing shortage will lead to a rental crisis. He says massive queues of house-hunters at rental inspections will drive rental prices up.
"It's already happening and it's going to happen in greater and greater numbers because housing is undersupplied, it's unaffordable and rents are now going up."
Properties for sale outnumber those for rent by more than three to one in many Perth suburbs, recent RP Data figures show.
Rental vacancies reached a four-year low during February – dropping from 2.3% to just 1.6% according to REIWA, a drop of 700 houses.
The institute's data show the metropolitan vacancy rate at 1.9% for the first three months of the year, but during the months of February and March alone it dropped to 1.6%. Airey says a vacancy rate of 3% indicates a balanced market.
"The overall median rent for Perth is now $420 per week, which breaks down to $425 for a house or $400 for a unit, villa or townhouse," Airey says.
"REIWA data show that the stock level for rental accommodation has improved by 12% since the start of March, in sharp contrast to the 28% fall during January and February.
"The good news for tenants is that the vacancy rate does not appear to be dropping any further and seasonal demand is levelling off."
Airey says while there is strong demand for accommodation Perth will avoid the rental crisis of March 2007.