Rental market in a down cycle

THE Federal Govern-ment’s First Home-buyers’ Grant has successfully enticed thousands out of rental accommodation and into their own homes.

While this has made for a thriving building industry and increased real estate sales, the rental market is suffering from its highest vacancy rates in four years.

Real Estate Institute of WA June 2001 quarter figures put the Perth rental market’s vacancy rate at 4.2 per cent, however REIWA public affairs director Lino Iacomella estimated that figure could have grown to 4.4 per cent. The vacancy rate for the March quarter was 3.3 per cent.

The high vacancy rate also could be attributed to the surge in construct-ion, which has led to an increase in the stock of new rental properties.

Mr Iacomella said that, while the outcome of the grant had been unfort-unate for the rental market, the vacancy rate was not yet serious.

“The average vacancy rate is around 3 per cent and it starts to get serious when it gets up to about 6 per cent,” Mr Iacomella said.

The current vacancy rate also meant flat rents, Mr Iacomella said.

REIWA figures show 49 per cent of new rental properties occupied in the June quarter took more than two weeks to be let out.

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