Signs of green shoots are emerging in Perth’s rental market, with median weekly house rents recording quarterly growth for the first time in almost five years.
The Domain Group’s quarterly Rental Report, released on Thursday, revealed weekly house rents grew 1.4 per cent to $355 during the March quarter.
“Following a prolonged period of price declines and a rise in listings, the rental market in Perth is showing signs of stability,” Domain Group data scientist Nicola Powell said.
“Perth remains the most affordable rental market for houses and one of the most affordable rental markets for units, and its recent rise in gross rental yields may start to entice investor activity in the coming months.”
Perth rents fell 4.1 per cent annually, and although this trend had continued since 2014, the rate of decline had eased.
Weekly unit rents remained flat during the quarter and annually, at a median of $300 per week.
This marked four consecutive quarters of no price movement.
Peter Peard, Peard Real Estate Group chief executive, said Perth’s rental market had become balanced.
“For the past three years it has been a tenant’s market as landlords have had to substantially reduce rents to find a tenant because of a residential building boom that occurred during a time when a large number of people left the state following the end of the mining boom,” he said.
“This led to a large oversupply of rental properties in Perth. The market has now absorbed most of this over supply so rents have now stabilised.
“This is reflected by the Peard Real Estate Group’s rental vacancy rate which has almost halved over the past 18 months from 6 per cent to around 3 per cent.”
“Properties are being opened at more flexible hours for potential tenants, that is, after hours and on weekends, and we are starting to again see multiple prospective applicants attend properties, which in turn sees multiple quality applications being submitted,” he said.
“Prices are also starting to increase.”
Dr Powell said investor activity had retracted since 2014, which was roughly when people moved away from the state as the resource boom faded.
“What we did see, particularly over those challenging conditions of the sales market, is those who chose to move away from WA or Perth, chose to list their home on the rental market rather than sell in a softening market,” she said.
Dr Powell said those conditions had eased, with the influx of rental listings drying up.
“That’s what has helped to counteract the median weekly asking rent and we have started to see that improvement over the quarter and it’s flat lined over the year,” she said.
Mr Coleman said there had been a shift in 2018, where several owners were looking at moving back into their rental properties rather than re-letting or selling.
“Our prediction for the remainder of the year is slow and steady with a slight hold through winter,” he said.
Dr Powell agreed and said Perth had moved away from negative growth.
“I think this year it will probably be relatively steady and in line with what we have seen over this first quarter,” she said.
This article was written by Lisa Calautti and originally published on domain.com.au