Demand for premium rentals expected to remain high in 2022, with expectations of international borders to open
Hotly contested premium rentals are likely to remain in high demand into the new year as the nation braces for the opening of international borders.
Mont Property Business Development Manager Nicholas Cole said the Applecross-based real estate agency had seen incredible demand across all rentals in the past year, but high-end properties had seen the most impressive price results.
In one case, Mont secured a tenant for a $1450-a-week Mount Pleasant property in just 24 hours – before it was even listed.
Mr Cole said the combination of Perth’s competitive, robust property market, low interest rates and a lack of available rentals had fuelled markets. He expected executive homes for lease to become more in demand with the easing of COVID restrictions, in particular the opening of international borders which could draw ex-patriates home.
“It’s obviously still up in the air, but I think when the borders open it might allow more people to get back to WA from overseas, so that process might put a lot more pressure on the current rental situation,” Mr Cole said.
“In the sales market, a lot of people have seen the prices start to move again so they’ve sold. Generally, that means they’re renting a property in between because they can’t find anything to buy because the market is so tight.
“That’s also put a lot of downward pressure on the rental market with people who have cash and just need a property paying above the odds.
“Competition for rentals is tight and we are constantly working with a number of highly qualified tenants looking for rentals.”
In recent months, Mont has leased several high-end properties including 99 Clement Street, Swanbourne for $2750 a week and 26 Crossman Pass, Salter Point for $1600 a week.
In an off-market deal, Mont signed a tenant for 82 Ullapool Road, Mount Pleasant within a day, attracting a rental return of $1450 a week.
Mr Cole said the current rental situation was unprecedented in his time in the industry.
“I’ve been in the industry now 12 years. 2013 and 2014 was out of control, but I feel like the speed at which this occurred has been the biggest surprise. In a 12-month period it’s gone from zero to 100.”
It comes as the Real Estate Institute of WA predicted the state’s strong property market would continue into 2022, with estimations Perth house prices will rise a further 10% next year. This year the city’s house prices jumped by 14%.
REIWA President Damian Collins anticipated Perth’s rental shortage would improve slightly next year as new constructions are completed and investor activity grows.
“Whilst rental listings are likely to remain lower than historical averages, we do expect to see more available rentals on the market in 2022 than we saw this year,” Mr Collins said.
“We’ve seen investor finance levels increase in WA during 2021, which should result in more properties being available to rent in 2022. Additionally, as construction projects are completed and people move into their new homes, this will free up some of the rental stock that is currently occupied.”
REIWA estimated median rent prices to increase between 10-15% during 2022, which is likely to attract investors.
Mr Cole said prospective tenants looking across the City of Melville favoured homes with multiple living areas and flexible accommodation. Highly reputed schools were also a significant drawcard.
“The quality of the rental applications we have received has been excellent,” he said. “It’s very competitive so the owners are getting a really good choice of applicants. It’s really unfortunate for renters though, you wish you had more properties to give them but there’s just not enough around.”
Meanwhile, the CoreLogic Hedonic Home Value Index, released last week, said the easing of pandemic restrictions and opening of international borders could impact rental markets nationally.
“Open international borders, despite the recently announced delay, are also a net positive for housing markets, although the most immediate impact from resumed overseas migration will be seen in rental demand, while an uplift in purchasing a home from permanent migrants is likely to be more gradual,” the report said.
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