Rental Market Update!

It is no secret that the WA rental market is heading towards a crisis as the quantity of rentals decrease, demand pressures rise and the introduction of WA’s eviction suspension discourages landlords. In contrast, the current rental markets in Sydney or Melbourne are experiencing a surplus in vacant properties seeking tenants. Perth is experiencing huge crowds at property viewings, an influx of applications and desperate tenants offering higher rates than the asking rate. 

LJ Hooker state director, Andrew Friebe stated the increased demand is due to a number of factors. One being the WA residents that were allowed to come back into the state, are returning home and are on the hunt for a place to live. Another considering factor is the “large mining businesses have been encouraging FIFO workers to relocate to WA from the eastern states.”

Contributing factor is the selling market. Investors who brought at the peak of the sales market haven’t been in the best position to sell for many years. Now with the sales market performing well again, investors have been opting to sell their properties instead.

Real Estate Institute of WA president, Damian Collins said the number of properties advertised for rent had dropped by 100 each week and stock levels were currently below 3000 for the first time in a while. Meanwhile, the vacancy rate has fallen from 2% to 1.3% and is likely to keep falling lower. 

Mr Collins said “this has turned into a severe rental shortage and it’s not far away from a rental crisis.” He believes the market will run out of rental properties as there will not as enough stock to satisfy the demand from tenants. The First Home Builders grants have encouraged young people to start building properties which the market may see boost the rental stock but not until April or May next year.

Mr Collins suggests the government has used the global pandemic as an opportunity to introduce new ways of rent control and interfere in the free market. Discouraging landlords and reducing supply further with already experiencing a shortage of rental properties, this will prove it harder for tenants to find and secure a property. 

Rental agencies are receiving rental applications from tenants who are desperate for a home, going to extreme measures to secure a property. For example, applications offering $50 - $100 per week above the asking rental rate. Nowadays applicants will be attending property viewings with 50 other groups of people, which is unheard of. 

Currently the sales marketplace has limited investors, which is likely due to the residential tenancy laws/eviction ban. This will encourage investors to remain attentive and therefore intensify the supply issues in rental properties we are seeing now. 

Going forward, we continue to encourage tenants to keep applying for the properties going on the rental market and continue with a positive attitude. We want landlords to not be discouraged from the Government's rent control policies, now has never been a better time to put the investment up for rent and get a good return.

Umbrella Realty is here to help you with any situation or any questions you may have, please reach out to us on 9779 9990 or email info@umbrellarealty.com.au