Perth is the most affordable capital in the nation to rent a house, with rental prices increasing 4.3 per cent during the year to June to a median price of $365 a week, new figures show.
The city’s median rent is now $15 higher than the low points reached in 2017 and 2018, according to the latest Domain Rental Report, released on Wednesday.
In another positive sign, the annual percentage growth in Perth unit and house rents over the past year is the fastest annual growth recorded since 2013.
Unit rents increased 3.3 per cent in the year to June to $310 a week, the highest point since 2016.
Over the past 12 months rents for houses and units increased in all areas of Perth, except for the south-east.
Furthermore, Perth’s year-on-year weekly house rent growth ranked second in the nation, which was led by Hobart at 9.8 per cent to $450 a week.
“I think it’s obviously not a good sign for tenants who are having to pay rents that are rising faster than wages and inflation, but in terms of the overall Perth story it’s a sign of a recovery or a stronger property market,” Domain economist Trent Wiltshire said.
In another hint of a strengthening rental market, Perth’s rental vacancy rate declined from 3.8 per cent to 3 per cent in the past year.
Mr Wiltshire said Perth’s rental market was rebounding off the back of an improving WA economy and a pick-up in population growth.
Abel McGrath Property Group investment management department lead Jessica Bertocchi said Perth’s rental market was unpredictable but was showing signs of improvement in some areas.
“We are getting more inquiries and views on smaller properties and less inquiries on larger ones, where in the past it was quite the opposite,” Ms Bertocchi said.
“I think the rental market is picking up but in selective areas. I also think that families who have secured larger homes in the past now realise they are getting a good deal and are therefore not looking to move, hence fewer inquiries for larger family homes that are available.”
LJ Hooker state director Andrew Friebe said Perth’s rental market had strengthened with vacancy rates tightening in the past couple of months and demand outstripping supply in many suburbs.
“Over the past six months we have seen a pick-up in the market with rents increasing in many suburbs,” Mr Friebe said.
“There is an increase in demand for rentals in the Perth metro due to Australian and international corporates coming back into the market with new funding being received for the resources sector.
“This has led to a significant amount of people moving from interstate into the Perth market.”
Properties located within five to 10 kilometres of the CBD were highly sought-after, Mr Friebe said, with Mount Hawthorn, West Perth, North Perth, Mount Lawley and Highgate in demand.
“Beachside suburbs are also hotly contested by potential tenants in the current market,” Mr Friebe said.
Harcourts chief executive Paul Blakeley said there had been definite improvement in the market with vacancy rates, days on market and the number of new properties available for rent gradually reducing over the past 12 months.
“There are several reasons behind this. The oversupply of new residential houses and units has slowly been absorbed over the past three years, the tightening of lending criteria from the banks after the fallout from the royal commission has meant potential buyers are left to rent a little longer and a slight increase of overseas migration have all helped with the improvement,” Mr Blakeley said.
Tenants on the hunt for a rental property were advised to do their research and create a shortlist of properties that looked good online, he said.
“Drive past the properties first and cull those that are unsuitable. Register to view, turn up on time and be thorough with your inspection to ensure it meets your needs,” he said.
“Check out nearby schools, shops and public transport links. Once you are satisfied that you’ve found the right property, lodge an application and advise the people you have nominated as a reference that they may receive a call. Rental prices have been stable for a while, so expect to pay close to the asking price.”
For landlords, Ms Bertocchi said presentation was key.
“If your home has been a rental for years it may be time now for a deep clean, new carpets and a lick of paint,” Ms Bertocchi said.
“The saying, ‘Don’t judge a book by its cover,’ is not true in real estate. The first thing your prospective tenant sees is the exterior of the home, a hour or two’s work to freshen things us could be the key in securing your new tenant.”