Perth’s rental market and Regional Western Australia’s (WA) overall market conditions are expected to see improvements next year, according to The Real Estate Institute of Western Australia’s (REIWA) 2019 outlook.
The capital’s rental market has been posting strong results this year, thanks to stable median rents, healthy leasing activity levels, declining listings and a plummeting vacancy rate. What’s more, this trend is likely to be carried over into the next year.
REIWA analysis showed that Perth rental market should continue tracking an upward trajectory through 2019. This will be made possible by key drivers such as stable population growth and slowing new-building construction levels.
Population growth in WA is anticipated to remain steady, while new dwelling commencements are expected to slow down, and available rental stock should continue to drop. This should result in higher competition among tenants, putting further downward pressure on the vacancy rate, which recently declined below 4% for the first time in four years.
Perth’s overall median rent price, meanwhile, has held at $350 per week since April 2017, marking the longest period of stable rents Perth has experienced since REIWA first started recording rental data in 2001.
Having considered such positive outcome, REIWA President Damian Collins expects an upswing in median rent value.
“We’re at 19 months and counting of stable median rent prices in Perth. If listings continue to decline and leasing volumes remain healthy, we should see the overall median rent price increase in 2019 for the first time since September 2014,” said Collins.
However, Collins also warned that any changes to negative gearing could pose a risk for both the rental sector and wider property market.
“In the short term, the improvements we’ve observed in the rental market could see investors returning to the market, however if changes to negative gearing are legislated, this will likely dampen investor activity and have a detrimental effect on the wider WA property market just as it is starting to find its feet,” he said.
In terms of Regional WA, REIWA projected overall market conditions to improve driven by investment in the mining sector.
Collins shared that Port Hedland, Karratha and Kalgoorlie are areas to watch, with the new mining projects contributing to the restoration of confidence in these regions. These projects are expected to create thousands of new local jobs, which should continue to support population growth, improve demand for housing and aid recovery.
Overall, the WA property market is expected to remain stable in the New Year.
