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Rental Market Update - November 2017
The rental market has been, and will always be, an ever evolving entity.
Over the past four years, it has been unforgiving and often very cruel to property investors – A long lasting hangover from a mining boom.
It is too often forgotten that a boom is (as defined by the Oxford dictionary) a period of great prosperity or rapid economic growth, rather than a sustainable, long term period.
What had happened in Perth was far outside of a ‘normal’ economic cycle and we are now experiencing a correction period.
I would compare the boom to life in my 20’s – long gone and something to look back and remember fondly!
In the past 2 months we have seen some respite with a decrease in the level of for properties available to rent. There are now around 9,300 available – the lowest figure since early 2016.
This change brought the vacancy rate down from 7.2% to 6.9%.
The slight shift in momentum is yet to alter pricing trends. The median rent has been sitting at $350 per week for a few months and is predicted to fall further before it improves.
We are still finding that price amendments are often required during the lease marketing process to generate interest and remain competitive.
Tenants appear to be enjoying the shoe on the other foot, as it were. We have noticed a significant evolution in their behaviour over the past few years.
Many are very flippant in their approach to leasing , most noticeably in regards to commitment – Either applying for multiple properties, submitting cheeky offers or not showing up to inspections (having previously booked in).
For us, it now accepted as path of the course, but it does not make it any less frustrating - If anything, the reward (of securing a lease) is now sweeter than ever , with each new lease restoring enthusiasm and pushing us further forward!
The last recorded peak in the rental market was mid 2013: 4,107 properties listed for rent, the Median Rent was $480 per week and Vacancy was 3.20%.
Since 2011 supply has increased by 520%, median rents have fallen by around 30% and the average days on market has jumped by 60 days.
In spite of all the road blocks and obstacles, our results have continued to improve:
366 Leased in 2014, 387 Leased in 2015, 427 Leased in 2016…
As they say when they goings get tough…