Rental business in Perth is off to a good start this year, with continued recovery recorded in the market over the December quarter.

The vacancy rate dropped to 2.8%, marking the lowest rate in more than five years, according to the Real Estate Institute of Western Australia (REIWA).

“The last time the Perth vacancy rate was this low was in March 2013. The rapid improvement we’ve observed in the last 18 months is impressive, especially considering the vacancy rate peaked at 7.3% in June 2017 – the highest it’s ever been. Now that the vacancy rate is below 3%, we can safely say the market is in a recovery phase with landlords now the beneficiary of the current rental environment,” said REIWA President Damian Collins.

The overall median rent price was steady at $350 per week. This also meant that median rent in the city has been stable for seven consecutive quarters, which is the longest stretch of stable rents Perth has posted since first started logging rental data in 2001.

While the overall market was kept stable, there were 105 suburbs that recorded an increase in price, with North Coogee, Churchlands, Ardross, Daglish and Munster leading the upward trend.

“When we drill down further and isolate houses and units, the results of the December quarter are very pleasing for landlords, with both houses and units experiencing increases in rents. The median house rent increased $10 per week to $360 during the December quarter, while the median unit rent increased $5 per week to $325,” said Collins.

This improvement did not reflect on the overall median because there were more units leased during the quarter than houses. As a result, the overall median stable was kept.

Should the rental market maintain its performance, Perth’s overall median rent price will rise in 2019, which will be good news for landlords.

“If the rental market continues on its current trajectory, we should see Perth’s overall median rent price increase in 2019, which will be a welcome development for landlords,” Collins said.

In terms of leasing activity, there were 12,917 properties leased in Perth, down compared to the previous quarter. However, this is not surprising given that during this time of the year, activity tends to decrease before increasing again early in the New Year.

Kallaroo, Daglish, Melville, Merriwa and Hilton bucked the trend, experiencing the biggest increase in leasing activity. The suburbs, meanwhile, with the highest volume of leased properties were Perth, East Perth, Scarborough, Baldivis and Maylands.

“We expect to see a notable increase in leasing activity in 2019, with REIWA members already noticing a significant uptick in the volume of enquiries for rentals in January,” Collins said.

Listings continue to reduce, with the December quarter figure down 10% to 6,865. Year-over-year, it declined by 27%.

This is a positive result as the sharp decline in listings is a driving force behind Perth’s improved vacancy rate.

The reason for the drop? The listing stock is being absorbed more quickly due to population growth in Western Australia and fewer new-building projects commencing.

REIWA also found that it was four days faster for landlords to find a tenant for their rental in the December quarter than in the September quarter.

The average time it took to lease property was cut to 44 days, down from 48 days in the September quarter and 50 days in the same period last year.

“The signs for 2019 look very promising. The rapidly improving rental landscape combined with Perth’s favourable buying environment should hopefully see more investors enticed back to the market,” Collins said.