This time last year, the global COVID-19 pandemic fundamentally changed the way society functioned. Property markets here in Fremantle and surrounds had just started to wake from a near-five year slumber, with supply and demand across both residential sales and rental markets in relative equilibrium.
When COVID-19 related restrictions hit twelve months ago, it was reasonably anticipated that property markets would be adversely affected. Against expectation, sales took a brief pause then took off as supply tightened and buyers began to struggle to find suitable properties.
Uncertainty in the COVID-19 economy and fears over job security inspired would-be sellers to delay their selling plans. The results of shortening of supply coupled with heightened demand is on display at weekend home opens with multiple offers for property commonplace, prices are on the move – up about 5 percent in six months – and average days-on-market falling.
This overt demand has spilled over to the rental market. Many would-be buyers, unable to find a suitable home, are opting to rent adding to this underlying demand. There is short supply of rental stock generally due to below average investor activity across Perth over the past five years. Investors try to buy in rising markets and normally make up about 27 percent of all buyers. Perth’s investor levels have been at 15 percent or less for several years now and developers have responded by delaying projects that deliver the much-needed rental accommodation.
Given you can’t build new homes overnight, this trend of short supply will continue for a while and will worsen if WA remains COVID-19 free and our resource-led economy stays strong.
Vacancy rates across Perth are at below parity levels at below 1 percent with properties for lease at 2768 this week. Compared to last year’s 5573 listed rentals, the shortened supply is obvious.
Inevitably, rents are rapidly rising, up 12 percent already this year, despite the stupid moratorium on rent increases for existing tenancies that has been in place since March last year.
Tenants are understandably getting testy. In this market, when applying for a rental property, tenants must have all references, identification, proof of income and other necessary information completed and ready to have any chance of securing the property.
Tenants are well advised to apply within 24 hours of viewing a property too and should try and match their move-in date with the advertised lease-start date. Owners are mostly looking for longer term leases too so, if you can, try and lock-in at least a twelve-month lease.
A covering letter with your application that briefly explains your situation and why the property is ideal for you can also put your application to the top of the pile. Having a pet reference is also a good idea.
Most homes are renting for above the asking price nowadays so if tenants are looking for properties that are advertised at their maximum budget then it may be necessary to reduce that budget and leave some in reserve for negotiation.
Finally, property managers act for their owners. Tenants that behave in a manner that openly displays their frustration are less likely to secure a rental than those who adopt a more conciliatory approach.
Licensed real estate agents are regulated by the Department of Mines, Industry Regulation and Safety (DMIRS) with consumers able to seek advice and lodge complaints about agents’ behaviour to that department. The Real Estate Institute of WA (REIWA) also has a community hotline where consumers can obtain real estate advice … Read more
There are early signs that the property market is tipping back into equilibrium as listing levels creep up (currently at 3-year highs), numbers through home opens edge back and inflationary pressures bite. Although, it remains a sellers’ market with the balance between supply and demand still a long way from … Read more