Perth house rents surge by more than $80 a week to new record price – Capital Property Advisory

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Perth house rents surge by more than $80 a week to new record price

Article by: Lisa Calautti, Journalist

Source: Domain

July 08, 2021

Perth rents are at a six-year high. Photo: One Agency Middle Harbour

Perth rents are at a six-year high and have recorded the strongest annual growth of all Australian capital cities during the June quarter, according to a new report.

The city’s house rents experienced their fastest rate of growth in almost 14 years, with a 21.6 per cent annual rise to $450 per week – an $80 increase – according to the latest Domain Rent Report released on Thursday

“Perth house and unit rents have now hit a six-year high following four consecutive quarters of rising rents,” Dr Powell said.

“Unit rents edged $10 higher over the June quarter to $380 a week. Tenants are forking out $60 more a week compared to last year [and] this 18.8 per cent annual rise is the steepest in 13 years. Unit rents remain $70 lower than the mid-2013 peak. ”Median weekly asking rents: houses, June quarter 2021

JUN 21MAR 21JUN 20QOQ CHANGEYOY CHANGE
Sydney$550$550$5400.0%1.9%
Melbourne$430$430$4300.0%0.0%
Brisbane$450$440$4002.3%12.5%
Adelaide$430$425$3951.2%8.9%
Perth$450$430$3704.7%21.6%
Canberra$630$600$5705.0%10.5%
Darwin$593$550$4907.7%20.9%
Hobart$495$480$4503.1%10.0%

Xceed Real Estate property management licensee Daisy Campbell said Perth’s rental market had begun to slow down compared to the high demand of a couple of months ago, with only 50 or 60 per cent of people now showing up to inspections they had registered to attend.

“Previously, we were seeing super-high numbers of people registering and a super high attendance rate,” she said. “We are seeing fewer quality applications in the market at the moment and we are seeing a bit of a decrease in applications offering above asking price.

“I think that what we seeing now is the bottom end of the market still moving around and we are a bit delayed and behind with the [rental] moratorium. So, I think that’s where we are starting to see more movement now. It’s kind of like the hurricane and we are at the bottom.”

JLL’s Western Australia strategic research manager, Ronak Bhimjiani, said the current stock of listings available for rent was still low at 2830 properties, which was a considerable drop compared to the 7000 listings in the market just three years ago.

However, he said, over the last couple of months the market had been changing, with a decline in weekly leasing activity.

“We had been leasing 1000 properties a week over the last 12 months, which is a huge number,” Mr Bhimjiani said. “All of a sudden over the last four weeks we are at 700 leasings a week. That’s a 30 per cent reduction.

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Rents in Perth have skyrocketed over the past year. Photo: One Agency Middle Harbour

“The pace of growth is not as strong as it was and I think a lot of that is down to the fact people are moving towards the established housing market. If you look at weekly sales activity, we are averaging about 700 properties being sold on a weekly basis versus a benchmark of 550 12 months ago.

“I think there is definitely a shift from your rental market to your purchase or established housing market.”

Dr Powell said the rate of quarterly rental price growth was not as high as last year, but with the vacancy rate holding steady at 0.8 per cent this might indicate more stable market conditions.

“It’s still going to be a competitive rental market but we might start to see that market slow in comparison to what we had seen,” she said.

The June quarter was the first quarter to capture the end of the state government’s rental moratorium on evictions and rental hikes, Dr Powell said.Median weekly asking rents: units, June quarter 2021

JUN 21MAR 21JUN 20QOQ CHANGEYOY CHANGE
Sydney$470$470$5000.0%-6.0%
Melbourne$365$375$415-2.7%-12.0%
Brisbane$400$400$3800.0%5.3%
Adelaide$350$350$3200.0%9.4%
Perth$380$370$3202.7%18.8%
Canberra$500$500$4700.0%6.4%
Darwin$450$430$3804.7%18.4%
Hobart$400$420$380-4.8%5.3%

“We are going to have tenants in Perth that are going to be vulnerable to now being in a rental market that’s had significant increases in rent,” she said.

“It’s the biggest upward change in rents in more than a decade and that places tenants in a vulnerable position. I think we will see a shift [by] tenants to more affordable rentals if they’re facing large rental hikes.”

Furthermore, Dr Powell said, demand for rentals had surged over the past year as more Australians decided to relocate west and expats returned.

“The flow of residents away from Perth had previously been a drag on the demand for housing, but with a positive net flow of interstate residents, Perth’s vacancy rate remains firmly at a multi-year low,” she said.

“This gives tenants less choice and landlords greater ground to raise rents. Investors are starting to react to strong property price growth, low interest rates, rising rents and the perceived value that Perth offers compared to the east coast.”