Perth’s runaway rental market to continue into 2023 with high demand and surging prices

3 December 2022

Perth’s gangbuster rental market is showing no signs of abating with extreme demand expected to continue, pushing prices up well into 2023.

Mont Business Development Manager Nicholas Cole said December and January were shaping up to be a busy time in the local rental market, with families relocating, starting new jobs and settling children in new schools in time for the new year.

“The start of this year was very busy and it slowly started returning to ‘normal’, but the last couple of months, in particular, have gone crazy again,” Mr Cole said.

“We are having very high numbers of interested parties at home opens and properties are leasing extremely quickly, well above the asking price.”

Latest data from CoreLogic, released this week, shows Perth property values held firm in November with zero change in growth during the month. In the past 12 months, property prices have seen 3.9% growth.

Rental prices for Perth houses have surged 10.5% in the past year, while unit rents have increased by 9.5%. The gross rental yield across all dwellings in Perth is now 4.6% – up on the national average of 3.7%.

Mr Cole said a significant number of prospective tenants were in search of rentals within catchments of sought-after schools, particularly the Applecross and Attadale areas.

Alternatively, in Mont’s South Perth managements, one bedroom units were attracting in excess of 30 registered attendees to each home open.

“A lot of people seem to be moving to try and secure places in schools. That seems to be a bit of a trigger at the moment. So, we’ve got crazy conditions normally and then coming into a generally busy time of the year in December and January, those two factors combined have really kickstarted things again,” Mr Cole said.

“Quality properties are getting the most attention. They are moving the quickest and attracting exceptional prices, so spending money on your investment as far as renovations and upgrades go is probably a wise decision.

“This time of the year we see a lot of high-end tenants coming from over east or overseas, so we are still getting a huge number of people coming into the state. I can’t see the rental market going backwards.”

Real Estate Institute of WA Chief Executive Officer Cath Hart said Perth’s population grown had continued to support the city’s strong rental market.

“Both net interstate and overseas migration are in positive territory for the first time since 2013 and, as many migrants prefer to rent initially, this is seeing increased demand and competition for rentals. This in turn is maintaining pressure on prices,” Ms Hart said.

“We do not expect prices to fall until the rental shortage eases.”

REIWA data shows it took a median of 14 days to lease a rental during November – three days faster than three months ago. Perth’s median rent price is now $500 a week.

“The rental shortage remains a critical issue for the WA rental market,” Ms Hart said.

“Over the past 18 months we have seen a significant reduction in the number of private rentals as investors sell to take advantage of capital growth or take their property off the rental market for their own use.”

CoreLogic Research Director Tim Lawless said the Perth market was yet to record any signs of a material reversal in housing prices.

Perth’s healthy level of housing affordability, tight labour market and strong economic conditions had so far insulated the city from a downturn, he said.

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