The real estate lease vacancy rate in Perth’s suburbs has dropped by almost 50% in the past 15 months. As a result, landlords may be looking at a lucrative 2019 which in turn might get costly for Perth’s tenants.
From 7.3% in July last year, Perth’s real estate lease vacancy rate fell to 3.9% in the September quarter. The city is at its lowest vacancy rate since the last part of the mining construction boom in March 2014. This also comes as median house rents increased from $10 to $360 per week over the past three months.
132 suburbs reporting growth in leasing activity
In the September quarter, Jolimont reported a 150% increase in real estate rental property leasing activity. Other cities that have also recorded a surge in leasing activity during the September quarter are Iluka at a 133% increase, Caversham at 126.7%, Connolly at 100%, and Singara at 85.7%.
Altogether a total of 132 suburbs reported growth in the number of real estate properties rented with the total number of properties available for rent down a quarter from last year.
The reason for Perth’s low vacancy rate
Perth’s low vacancy rate is due to a recovering mining sector where BHP, Rio Tinto, and Fortescue Metals all committed to big new iron ore projects this year. As Western Australia continues to become a global authority in producing lithium, the state finds itself in the middle of a home building slump.
From January to August of this year, there were only 8,779 home approvals according to Australian Bureau of Statistics data. It places the state in its worst year for dwellings approved since 2000.
Expect rents to increase
According to newly elected Real Estate Institute of Western Australia (REIWA) president Damian Collins, Perth’s rent rates “will increase a reasonable amount in 2019.” He adds, “It is certainly promising for landlords, especially because there is such little building supply entering the market.”
“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.”
As more people migrate to the state applying for these job vacancies and with no sign of new housing supply for the state, all signs point to a very profitable 2019 for Perth’s landlords.
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