Perth hits rental crisis as vacancy rate plummets below 1%
Updated: Mar 24, 2021
Perth’s residential vacancy rate continues to rapidly decline, falling to 0.96 per cent which is the lowest it has been in 13 years, and only the third time in 40 years it has dropped below one per cent.
REIWA President Damian Collins said the vacancy rate is tracking to potentially reach the lowest we have seen which was 0.8 per cent in March 2007.
“With rental listings in Perth falling eight per cent to 2,926 over the month, we have certainly hit a rental crisis where tenants looking for a rental will potentially find themselves unable to find a home,” Mr Collins said.
“In addition, the reduced supply is putting upward pressure on rents with property managers on the ground finding increases in rent are occurring on new leases, as prospective tenants are in competition with each other to secure the limited supply.”
Typically, during this time, we would see investors enter the market and increase stock levels however we are seeing low levels of investor activity. If investors are not encouraged back into the market, then the rental crisis will only get worse.
“Western Australia has approximately 17 per cent of properties purchased by investors, whereas we would normally expect to see investors buying 30 per cent or more of the available properties. At the same time, we still have investors exiting the market, meaning the supply of rental properties is not sufficient to keep up with demand,” Mr Collins said.
“To entice investors back into the market and increase stock levels, we need to ensure that the emergency residential tenancy laws are removed in March 2021. The government needs to send a clear signal to the market that they have no intention of extending the legislation further if we remain relatively COVID-19 free. Otherwise, investors will continue to sit on their hands and make a bad situation even worse.”
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