Rental Residential Property Market Wrap Up – July 2022
Perth’s rental market remains extremely competitive as we enter the second half of 2022, with rents rising another 2.9% across the June quarter, according to CoreLogic. This means the median Perth rent is now $515 – 6.7% higher than the same time last year.
Perth property is the most affordable of any major Australian metropolitan area with the average yield being unchanged for the past year at 4.38%, almost double the rate you could expect in Sydney and significantly higher than all other metropolitan centres except for Darwin. At the same time as incomes are higher than in any capital city outside of Sydney and Canberra.
While it’s good news for WA property owners and investors, tenants are feeling the pressures of an incredibly competitive market with rising rents.
Vacancy rates remain low – Perth’s rental market is being driven partly by increased demand. We’re seeing a return to higher internal migration on the back of a growing state economy. The latest unemployment rate was just 3.4% with more migrating to our city for work.
REIWA members reported there were 2,244 properties for rent in Perth at the end of last week, which is 3.4 per cent less than the previous week.
Last week’s rental listings figure is 2.4 per cent lower than four weeks ago and 16 per cent lower than a year ago.
Leasing activity decreased one per cent in Perth last week, with REIWA members reporting 678 properties leased. According to Domain, the Perth vacancy rate was even lower in June – at just 0.9%.
The Perth market typically slows in winter, so it’s pleasing to see we are still experiencing growth. This is especially considering the three recent interest rate rises!
Sales Residential Property Market Wrap Up
by Andrew Davey (Director, Davey Real Estate)
The residential property market outlook for Perth in the Northern Beach suburbs is swinging towards a buyers market for sales but is still a landlords market for rentals.
Prices are still holding for both rentals and sales and demand is still solid for both categories, particularly for rentals.
Interest rate increases are now considered to be “baked in”. We can expect large jumps in interest rates before Christmas 2022.
For example, Tyson Barry recently sold this property on Walter Padbury Boulevard, Padbury and received multiple offers, despite the asking price being well above the Padbury median price. Check out the property HERE
Our expectation is that prices will (at the very least) hold despite the interest rate rises. Expect rentals prices to increase slightly until at least December.
When making our decision, we considered the following points
Reasons why residential house prices will hold/increase in Perth
- WA has positive immigration numbers
- Perth is the most affordable major capital city in Australia to buy in
- Rent is increasing and rental yields are expected to improve, attracting investors
- Vacancy rate is still critically low in Perth
- Job vacancy rates in WA are at historically low levels (everyone has a job!)
- Wages are growing
Reasons why residential house prices will decrease
- Forecast interest rate rises makes people nervous and affects buying behaviour
- Perception from buyers that residential house price rises may stop/slow prevents them from buying (especially as an investment)
- Inflation results in less money available for a property deposit.
If you are interested in seeing how the value of your property has changed in this current market, contact Alison to arrange a FREE online Market Appraisal (Rental or Sales) by CLICKING HERE. Get your FREE Corelogic (Australia’s biggest knowledge base for property) Market Analysis of your property by adding BLOG to the Promo Code