Perth’s rental market picked up mixed results in the June 2018 quarter, with stable house rents and rapid leasing times cosying up to passive leasing activity and dropping listings, according to real estate firm REIWA.
REIWA President Hayden Groves pointed out that the June quarter’s mixed results were not surprising considering that the city’s rental market was in a transitional phase.
“Although the worst of the downturn appears to be behind us, it’s not uncommon to see results fluctuate as the market transitions into a recovery,” Groves said. “The change in seasons has also contributed to this quarter’s results, with the cooler weather impacting activity levels. We tend to see activity slow during the winter months before picking up again in spring.”
In terms of the median rent price, Perth saw stable figures in the June quarter, maintaining a price per week of $350 for a fifth consecutive quarter.
“Rent prices have been stable since the June 2017 quarter, which is pleasing. After experiencing prolonged periods of freefalling rent prices, the stability we’ve observed over the last 12 months is a welcome change and should provide landlords with confidence,” Groves added.
While Perth’s rent was generally stable, 102 of its suburbs experienced median rent price growth.
“The five best performing suburbs for rent price growth in the June quarter were Attadale (up 75.8% to $580 per week), Jolimont (up 50.9% to $423 per week), Burswood (up 33.3% to $480 per week), Booragoon (up 28.4 % to $475 per week) and Hamersley (up 28.4 % to $430 per week).”
Other top gainers were the suburbs of Karawara, North Fremantle, Mount Nasura, Mount Claremont and Hillarys.
The city’s leasing department, on the other hand, recorded a total of 12,633 rented properties within the June 2018 quarter.
Leasing activity dropped 10.4 % over the June quarter and was down 4.1% compared to the June 2017 quarter. Groves claimed that this was because of the slowdown in population growth in the area.
“The latest population figures for WA [Western Australia] show migration into the state has declined by five per cent, which has likely influenced leasing activity levels in Perth. The rental market feels the impact of changes in population first, with new migrants to the state relying on rental accommodation to set themselves up.“
In addition, tenants chose to remain in their dwellings when prices were declining and good deals were abundant in the market.
“After 12 months of stable rent prices, lower activity levels suggest tenants are feeling confident rental prices have found a floor and therefore more inclined to stay put,” Groves noted.
Despite the general slump in leasing activity, REIWA’s data showed that 71 suburbs across the metro bucked the trend and performed better than average.
“The five suburbs which saw the biggest improvement in activity were Brookdale (up 88.9 per cent), Ocean Reef (up 75 per cent), Kallaroo (up 63.6 per cent), Parmelia (up 48.3 per cent) and Hamersley (up 46.2 per cent).”
For rental listings, Perth was able to accommodate 8,293 properties at the end of the June 2018 quarter. Groves said though that the this figure was 2.5% lower than the March 2018 quarter figure and 22.9% lower than the June 2017 quarter.
“Rental listings in the metro area have declined significantly over the last 12 months, with far fewer properties available for rent this year compared to last,” Groves said.
“A key driver for this improvement is the slowdown of new dwelling commencements. With less new properties coming onto the market, existing rental stock is being soaked up faster, putting downward pressure on listing volumes.”
Finally, the average time to find tenants improved at 46 days, which is 2 days and 6 days faster than the March quarter this year and 2017’s last quarter, respectively.
“Although leasing activity softened during the June quarter, activity levels remain above long term averages,” Groves said. “This, combined with rapidly decreasing listings means tenants are needing to act faster to secure a rental property.”
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