Tenants call the shots in market dip

REIWA Warning

Rental property owners need to adjust their expectations amid falling rent prices and increasing vacancy rates, the president of the Real Estate Institute of WA has warned.

David Airey said many investment property owners had failed to grasp how much the rental market had changed.

Mr Airey said a slowdown in population growth and a jump in rental listings were expected to continue into the new year.

“While the median rent in the metropolitan area sits at $450 per week, typical rents for houses have dropped by $10 and units by around $15, with reiwa.com data suggesting a further drop is coming, ” he said.

“The vacancy rate in Perth is now 3.9 per cent, with more than 6000 available properties. Rents have come down and tenants have much more choice.”

Demand for luxury rental homes has also slowed, with the Real Estate Institute of WA revealing properties in Perth’s western suburbs have experienced drops in rent of between 20 and 40 per cent since 2012.

Acton Cottesloe and Dalkeith business development manager Siobhan Payne said that several months ago there was a period when breaking leases were frequent with family- occupied properties.

“Due to decreasing rent, tenants were finding they could get a similar property at a much lower rent and they felt it was more beneficial to break their lease, especially if the owner was not going to reduce their current rent in line with the ‘new’ market, ” she said.

Mr Airey said the rental system now favoured tenants.

“This means owners need to make sure the presentation of their property is at its very best and prospective tenants are offered creature comforts to secure a longer lease, ” he said.

Incentives such as air-conditioning and nicely presented properties were vital, Abel McGrath property management director Carmel Gardiner said.