Perth November 2017

The month in review: Perth

By Herron Todd White
November 2017

The Perth residential rental market has experienced its challenges in recent years which is in line with the poor performance of the residential sales market. REIWA advises that the vacancy rate as at the June 2017 Quarter was 7.3% and the overall median rental price was $350 per week with a similar result expected for the September 2017 quarter (figures not yet released). The March 2016 quarter statistics show the vacancy rate was 5.6% and the overall median rental price was $395 per week, clearly showing the downward slide of the market in the past 18 months. The following statistics have been reported by REIWA to 17 October.

While the general sentiment is still flagging, these statistics reveal that there are signs that the residential rental market in Perth is stabilising with a decrease in properties available for rent compared to the previous month and at the same time in 2016. This has been confirmed by verbal enquiries with local property managers however we caution that the market is still patchy. There has been improvement in the detached housing market, however continued over supply issues in the apartment and unit markets are placing downward pressure on pricing. Popular inner Perth suburbs are attracting more interest through enquiries for detached housing whilst the greenfield suburbs in Perth’s outer ring have less demand. In order to attract prospective tenants, property managers report that adjusting price by reducing asking rents is more common than offering rent free periods however there is evidence of this occurring.

It is no secret that the Perth economy has struggled in recent years, largely due to the downturn in the mining and resources industry with clear negative results in net migration and higher unemployment figures. However, there is evidence of green shoots and an uplift in business investment which may in turn enhance the local property markets in due course. As always, it will boil down to the basic economics of supply and demand.