Perth’s overall median rent increased to $470 per week during the March quarter, a rise of 4.4 per cent for the period and up by almost 12 per cent on the same time last year.
This breaks down to a median rent for a house of $480 and $450 per week for a unit.
The lift in asking rents during the March quarter was largely due to increases for flats, units, apartments and villas.
The latest increase is surprising given that the number of properties available for lease increased by more than 50 per cent in the six months leading up to March.
Equally surprising was the rise in properties for lease through the March quarter itself because this is traditionally a period of high demand that usually causes a seasonal dip in the vacancy rate.
REIWA analysis suggests that while there was some modest increase in demand for rentals during the March quarter it was offset by properties being freed-up by first home buyers leaving the rental system for a home of their own.
The inner-city zone within about 10kms of the CBD remains the dominant rental market as it includes about 85 per cent of all multi-residential property in the metropolitan area, of which half is rental property. This central sub-region saw a rise of $30 to a weekly median of $500.
While the outer regions experienced stronger demand for leases during the quarter, up by 19 per cent on December, it was the 9 per cent increase in leases in the inner city areas that were responsible for the overall uplift in metropolitan median rent. This was due specifically to the large rise in leases for strata dwellings following a dip in that sector during December.
The rental market is showing us that there is a flight to outer suburbs by many tenants looking for more affordable accommodation. This explains why in the south-east corridor through Gosnells there was a 27 per cent increase in demand during the quarter and that region’s median lifted by 6 per cent to $420 per week.
The jump in the overall median for the central region and inner city area was largely driven by the western suburbs, City of Perth, Fremantle, Bayswater, Bassendean and south- east parts of the City of Stirling such as Tuart Hill, Yokine, Mount Lawley and Dianella.
I caution against reading too much into the rent increase illustrated in several sub-markets, as much is caused by the types of homes being leased during this period and which may have skewed the March data.
We need to consider the rental data in context and the fact is the vacancy rate has eased off, lifting from 1.9 in December to around 2.3 per cent for the March quarter.
With the long-term equilibrium in Perth being a vacancy rate of 3 per cent, it seems things are trending towards normal despite some pockets of greater demand where competition is nudging up prices.
This article was originally posted on reiwa.com.
Image by Nick Findley via Flickr.