PERTH real estate agents are describing the winter just past as the worst ever for rental vacancies.
And while the market traditionally slows down in the cooler months, some agents are suggesting rental vacancy figures are well above those released by the Real Estate Institute of WA.
REIWA figures for the August quarter place the overall vacancy rate in Perth at 4.7 per cent. In comparison, the average vacancy rate for Perth is 3 per cent.
Rising vacancy rates is an unfortunate by-product of a property boom. At the peak of the late 1980s property boom the vacancy rate crept up to 10 per cent.
But according to REIWA public affairs director Lino Iacomella, the current Perth property market will avoid that level of vacancy this time around.
Mr Iacomella said the current boom was far more modest than those preceding it, with the level of construction of new stock nowhere near the level of overbuilding previously experienced.
“Nevertheless there has been some overbuilding and the increase in investors and the first home buyer’s grant has combined to push up the vacancy rate,” he said.
Investors now account for 25 per cent of property buyers, whereas investors account for an average 19 per cent of all buyers. And while the numbers of first home buyers is diminishing, the first home buyer’s grant has impacted on the rental market by reducing the traditional tenant market.
The combination of additional new housing stock being constructed while rental values remained steady has enabled tenants to become more selective about rental properties and upgrade without significant increase in weekly rental, Mr Iacomella said.
The strong growth of the WA economy was a source for optimism, he said.
“About 25 per cent of the population rents and the actual number of people renting is growing every year,” Mr Iacomella told WA Business News.
“We expect the demand for rental accommodation to grow strongly in line with the strengthening local economy.”
The Property Exchange property manager Jade Lippiatt said this winter had been one of the worst she had experienced with “perfectly good” rental properties sitting for longer on the market than ever before.
She said that, with more newly constructed housing coming onto the market, tenants were becoming more discerning with their choice of product.
“If there is no great amenity, no air-conditioning, no security and no parking, they are going to have problems renting it out,” Ms Lippiatt said.
In recognition of the greater need to attract tenants, Ms Lippiatt said Property Exchange had recently established a prospective tenant database. The firm also now shows rental homes to potential tenants over the weekend.
The increasing vacancy rate has prompted Ockerby Real Estate to do the same, showing rental properties on the weekend rather than relying on potential tenants to make time during the week.
“You want someone who is going to pay the rent and most people who work, work Monday to Friday but are available on the weekends,” general manager Douglas Ockerby said.
Ms Lippiatt said with more investors in the market and rising vacancy, the property management industry was changing and becoming more relevant in the real estate industry.