Perth's rental market has officially entered a crisis, with its vacancy rate falling to its lowest level in 13 years, according to the latest report from the Real Estate Institute of Western Australia (REIWA).
Rental listings fell by 8% in the month to 2,926, indicating a rental crisis. This has led to the city's residential vacancy rate to hit 0.96% this month. This is the lowest vacancy rate since the 0.8% rate in March 2007.
Damian Collins, president of the REIWA, said this was the third time in 40 years that the vacancy rate has dropped below 1%.
"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," he said.
While low vacancy rates are usually a trigger for investors to break into the market, the current level of activity from the segment remains muted.
"Western Australia has approximately 17% of properties purchased by investors, whereas we would normally expect to see investors buying 30% 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," Collins said.
This makes it crucial for the state government to roll out measures that can help encourage investors back into the local market, 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," he said.
