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Rental squeeze: Lease vacancy rate drops in Perth suburbs

Source: Perth Now

PERTH’S rental vacancy rate has nearly halved in the past 15 months, putting landlords in line for a bumper 2019 and tenants in for a hip pocket hit.

The city’s vacancy rate fell to 3.9 per cent in the September quarter, down from 7.3 per cent in July last year.

It is the lowest rate since the tail end of the mining construction boom in March 2014 and comes as median house rents also rose $10 to $360 per week over the past three months — the first increase in more than four years.

Western suburbs enclave Jolimont recorded a 150 per cent surge in leasing activity in the September quarter to pace the metropolitan rental market, but the rest of the top five — Iluka (133 per cent increase), Caversham (126.7 per cent), Connolly (100 per cent) and Singara (85.7 per cent) — illustrate how widespread the recovery has been.

The Perth suburbs where more leases are being taken up

graphIn all, 132 Perth suburbs recorded an increase in the number of properties leased with the total number of available properties down a quarter from the same time last
year to 7286, according to Real Estate Institute of WA data.

The resurgence follows on the heels of a recovering mining sector — BHP, Rio Tinto and Fortescue Metals all committed to big new iron ore projects during 2018 — and
as the State emerges as a global lithium powerhouse.

At the same time, WA finds itself in the middle of a home building slump with just 8779 dwellings approved in the eight months to August 2018, according to Australian
Bureau of Statistics data.

That places the State on track for its worst year for home approvals since 2000 (13,908). Approvals peaked at 24,709 in 2014 but tumbled down to just 14,283 last year.

With the slack rapidly coming out of the Perth rental market and little in the way of new supply in the pipeline, freshly elected REIWA president Damian Collins said the
signs were promising for landlords.

“When the mining boom ended a lot of people left the State and the rental vacancy rate went from around 1.8 per cent all the way up to 7.6 per cent,” Mr Collins said.

“About 18 months ago the number of people leaving WA started to dwindle and we are now seeing migration to the State picking up as the mining companies start
advertising more and more jobs.

“It is certainly promising for landlords, especially because there is such little building supply entering the market, and I expect rents will increase a reasonable amount in 2019.”

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