Home' API Magazine : December 2014 Contents 94 n APIMAGAZINE.COM.AU n DECEMBER 2014
igher vacancies of course indicate
an increase of supply in the
rental market, which ultimately
shifts the balance of power from
landlords to tenants. So does this mean
tenants in Perth’s market hold the
power? Experts say yes.
Louis Christopher, managing director
of SQM Research, says the rental market
remains sluggish with asking rents
showing rises of just 1.2 per cent to 1.7
per cent at the average capital city level.
“However, Perth rents have dragged
down the overall result,” he says.
“It’s quite clear rents in Western
Australia are falling quickly.”
Perth has recorded the highest
yearly increase in vacancies according
to figures released by SQM Research.
Perth’s vacancy rates have climbed 0.9 of
a percentage point to 2.5 per cent since
the corresponding period in July 2013.
And Christopher says Perth’s vacancies
will keep rising.
“I think it’s going to continue on for a
while,” he says.
“We’re not seeing any signs that it’s
going to level off. So it’s just speculation
when it does finally bottom out. My
impression is that it’s going to get worse
before it gets better at this point in time.”
nTHE UNPALATABLE REALITY
David Airey, president of the Real
Estate Institute of Western Australia
(REIWA), says there’s been a huge rise
in the number of properties hitting the
“In the past 18 months, we’ve seen
a jump of around 130 per cent in the
number of properties available for rent,”
“Increasing from around 2500 to
currently around 5900. At one point, we
had over 6000.”
So why has it gone up? Airey says it
has been bought about by a number
low, Collins warns it doesn’t necessarily
mean it suddenly makes a smart
“All those suburbs are about 15-plus
kilometres out of the city and in
those lower-mid socio economic areas,”
Despite having very low vacancy rates
in Perth’s current climate, location and
lack of infrastructure or amenities means
the likelihood of future capital growth is
potentially less than other areas.
And Airey says rents for more
expensive homes and apartments have
“ The cheaper rentals, not so much,”
Located roughly 20 kilometres from
Perth’s CBD, the suburbs of High
Wycombe and Forrestfield both have a
vacancy rate as low as 0.9 per cent
for July 2014.
Principal of Professionals Stirling,
Brendan Clark, says Forrestfield is still
affordable with a median house price
well below the city average.
“ The only housing type going in are
high standard homes. This isn’t a cheap
area any more,” he says.
While there are still some older
sections that are in original state housing
standard, Clark says a resurgence has
begun in the area.
“The biggest single factor was the
number of first homebuyers who moved
out of rentals and into their own homes,”
The positives of this move obviously
saw a surge of first-timers into the
market, particularly for new builds
and cheaper properties, Airey says.
The second factor was the downturn
in the mining and resources industries
which has resulted in the loss of a lot of
jobs and has had a big effect on more
expensive rentals with those corporate
Christopher says the fly in, fly out
workers who used Perth as their base
have all but gone.
“They were about building the mines,
building the infrastructure. So that part
of the employment sector has really been
smashed. They were using Perth as their
base and given those jobs are gone the
demand for rental accommodation has
nWHERE ARE THE
Christopher says he’s noticed the closer
you get to Perth’s CBD the higher the
vacancy rate becomes.
“So it’s very much higher in the inner
city ring. We’re getting vacancy rates
in excess of six per cent within a
two-kilometre radius of the CBD. But it’s
less acute on the outer ring of Perth.”
Properties in outer suburbs also have
lower vacancy rates managing director
of Momentum Wealth Damian Collins
says, suburbs with more housing
stock and not as many units, villas
“So we’re finding they rent a lot
quicker,” he says.
To help sort the wheat from the chaff,
API sifted through Perth’s suburbs with
the lowest vacancy rates to find the
standout performers. But just because
the vacancy rate for a particular area is
THE WILD WEST
Looking for property investment love in all the wrong places?
Unfortunately, you’re not alone. Perth’s vacancy rates have
been on the rise. API locates the areas that are the pick of a
rather unappetising crop. DINAH LEWIS BOUCHER [@DinahBoucher]
THE STATES n Western Australia
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