Several factors are pointing to the tightening of Perth's rental markets, as demand continues to catch up with property supply, according to the Real Estate Institute of Western Australia (REIWA).
The time it takes before a listed property in Perth gets rented went down by 13 days to 21 days in August, the quickest days-to-lease since the mining boom in 2015.
Homes in Maddington are the fastest to get rented, staying in the listings for only seven days. Other suburbs with quick days-to-lease are Armadale (nine days), Coolbellup and Wanneroo (10 days), and Secret Harbour (11 days).
The decline in days-to-lease is just one of the factors indicating strong demand in Perth's rental markets, said Damian Collins, president of REIWA.
"The high demand for rentals has seen rental stock on reiwa.com fall 10% on July, with 3,205 properties for rent at the end of August. Based on present levels of enquiry we expect stock levels to decline further in September," he said.
The increasing demand in Perth's rental market would likely translate to potential gains in median rents, Damian said. In fact, while the overall median rents remained stable at $360, rents for houses already increased by $10 to $380.
"We can expect to see continued upward pressure on rents in the coming month," he said.
However, it appears that there are a limited number of investors in the market looking to buy an investment property.
"It's important that we return confidence to investors and one way the state government can lead is to significantly reduce the number of properties subject to the residential tenancies COVID-19 legislation. Unless we get investors confident enough to get into the market, the rental shortage will only get worse," Damian said.
Perth's vacancy rate dropped to 1.6% in July, the lowest level recorded since March 2008. The conditions of Perth's rental market indicate a substantial imbalance between supply and demand. For a rental market to have an ideal balance between supply and demand, it has to have a vacancy rate of around 3%, Collins said.
"However, with it is now sitting below 2%, we are starting to see the impacts of limited stock, and it is only a matter of time before rents rise. In some areas, agents are reporting rents are already on the move up," he said.