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When Will The Perth Rental Crisis End?

When Will The Perth Rental Crisis End?

Perth’s rental crisis seems to have no end in sight.  The cost of rent in Perth is at a 6 year high.  It’s a great time to purchase an investment property but a tough time to be looking for a place to rent.  Let’s look at what’s driving the increase and how Perth’s stats compare with what’s going on in the nation’s other capital cities.

The Why Behind The High

 As of October 2021, REIWA notes that Perth’s rental occupancy rate is only 0.9%.  To put that figure into perspective, “a vacancy rate between 2.5 and 3.5 per cent represents a balanced market”, REIWA.  So just what is the reason for Perth’s rental shortage?  According to REIWA, WA’s rental market was already in a slump before introducing COVID restrictions.  WA’s government implementation of rent freezes and the rental moratorium couldn’t have come at a worse time for investors.   Investors who were already suffering before the COVID rental legislations, in turn, exited the rental property market throughout Perth and the state.  The result?  A steep decline in available rental properties.  

 Capital Statistics

The cost of renting a house or apartment is 21.6% higher than it was 12 months ago.  According to Domain, the average rental price for a house in Perth rose from $370 in the second quarter of 2020, to $450 per week during the same quarter of 2021.  Darwin followed closely behind with a 20.9% increase.  In comparison, Sydney and Melbourne recorded a 1.9% and zero growth, respectively.  However, the average cost per week of renting a house is highest in Canberra ($630 per week) versus $450 per week in Perth.

Domain’s figures reflect a similar trend in the rate increase for renting an apartment, with Perth leading the surge, recording an 18.8% in the cost of renting an apartment, followed by Darwin recording an 18.4% increase.  Sydney and Melbourne both recorded a decrease in the cost of renting an apartment.  Comparatively, the gap between renting on the West Coast versus the East has narrowed slightly, with the average cost of renting an apartment in Sydney now at $470 and Perth at $380.  

Untenable Tenancy

Rent increases are making securing a rental property almost untenable.   Why not see if you’re able to get out of the rent trap and own your own home? Interest rates are still at a historic low, and there are a range of government schemes in place to help Aussies purchase their own home.  You can read more about that by clicking on:  https://elendfinance.com.au/buying-a-home-has-never-been-more-affordable-than-it-is-now. We’d love to help you work out what your options are.  Give us a call; we love to help.

 

Written by Jason Pestano