Perth may have finally hit bottom, but despite rising vacancy rates rental activity is on the up, giving the market a lift
Falling dwelling prices are keeping Perth on the bottom rung of the national property market, but leasing activity is on the rise.
“Perth’s rental market appears to be recovering, with new REIWA data revealing improvements in leasing activity and listing levels during the September [2017] quarter,” says Hayden Groves, president of the Real Estate Institute of Western Australia.
“Where we were previously experiencing low leasing levels and high listings, that trend has now reversed. Properties for rent are declining and leasing activity is strong.”
With Perth’s overall rental rate staying at $350 per week, the number of properties listed for rent decreased by 9.5%, while leasing activity rose by 4.7% over this period. The improvement in rental activity was noted across all the subregions of WA.
“The North West subregion was the standout, with activity up 9.8%, followed by the North East subregion with a 4.4% increase,” Groves reports.
Among Perth’s suburbs, the rental markets of Hillarys, Ridgewood, Attadale and Bibra Lake recorded the most improvement. This is encouraging, considering how long Perth has languished under the downhill trend of its rental rates.
“With three key indicators of Perth’s rental market improving or stabilising, landlords and property investors can be confident the market has turned a corner. We expect these positive trends will continue as demand for rentals exceeds the number of properties available for lease,” Groves concludes.
Opportunities open up for FHBs
Century 21 Australasia chairman and owner Charles Tarbey agrees with the positive sentiment, noting that CoreLogic findings have been supporting this outlook.
“CoreLogic data attests to the fact that the future may be brighter for the market, as Perth dwelling values have recorded the first rolling quarterly capital gain since late 2014,” he says.
“The three months to November [2017] saw Perth dwelling values rise by 0.3%. The number of settled sales is rising and homes are selling faster compared to the year prior.”
As a result, opportunities are looking bright for first home buyers to enter the market. Nonetheless, BIS Oxford Economics’ Outlook for Residential Land 2017–2022 warns buyers to be cautious, pointing out that even with lot production easing, demand levels remain low. Furthermore, the existing significant oversupply will continue to bring down any potential upswings in the near future.
SUBURB TO WATCH
BICTON:
The suburb of Bicton recorded a spike in house prices in December 2017, boosting values to just shy of $1m.
Bicton is a largely residential area that’s bordered by the Swan River, a popular spot for families and residents who enjoy waterbased activities like swimming and fishing. The suburb is well stocked with amenities, including several shopping centres and parks. Bicton Primary School is located here, and Bicton is within Melville Senior High School’s catchment area. Thus, the rise in demand for housing is unsurprising.
Canning Highway is on the southern border of Bicton, and commuters are served by the buses stopping here as well as at Fremantle Station.
Amenities: The suburb is home to schools, shops and parks, which is ideal for families
Accessibility: Bicton is bordered by major roads like Canning Highway, and served by several bus routes
