Perth has recorded its first increase in rental prices the Western Australian property market has seen since January 2017, and sales are predicted to follow suit with the market showing a strong gradual improvement over the last four months.
According to the Real Estate Institute of Western Australia, Perth’s median rent increased to $360 per week in February.
REIWA President Damian Collins said median rents had remained stable for the longest period since reiwa.com first started capturing rental data in 2001.
“While the overall increase in median rent was up by $10 per week in February, this is a significant step in the WA property market and one we have been waiting a long time for,” Mr Collins said.
“This increase can be attributed to Perth’s vacancy rate dropping to 2.2 per cent, which is the lowest it has been since March 2013, coupled with listings for rent on reiwa.com being down compared to January.”
The top suburbs by median rent price growth for February include Stirling, Shenton Park, Ocean Reef, Thornlie and Bertram.
“Leasing activity dropped nine per cent compared to January and days to lease has improved by one day to take on average only 28 days,” Mr Collins said.
“As we head into March, which is usually one of the busiest months of the year for the rental market, it will be interesting to see how the market performs and if rents continue to rise, which is possible given the low vacancy rates.”
Perth sales market
Sales activity increased five per cent in February, compared to the previous month building on January’s improvement.
Mr Collins said it was pleasing to see the sales market showing a strong gradual improvement over the last four months.
“With sales activity on the rise, listings for sale were stable in February and it took on average only 47 days to sell, which shows that current stock is being absorbed at a faster rate,” Mr Collins said.
“CoreLogic’s Home Value Index increased in Perth by 0.3 per cent, which can be attributed to the increase in sales activity and stabilised listings.
“If things continue on this upwards trajectory, median prices should continue to increase – which hasn’t happened since June 2018.”
In February, reiwa.com data showed the median sale price in 65 per cent of suburbs had an increase or remained unchanged, with Kallaroo showing the biggest increase of 8.1 per cent to $735,000.
Following Kallaroo, Mount Pleasant, Wannanup, Mindarie and Woodvale rounded out the top five with all bar one suburb (Wannanup) having a median sale price higher than the Perth median of $480,000.
“After a long stretch of declines in the WA property market, it is great news that we are starting to see gradual improvements,” Mr Collins said.
“This could be the impact from various government initiatives and the lowered interest rates by the Reserve Bank of Australia put in place last year.
“With the RBA announcing that interest rates will be again lowered, taking the cash rate to 0.50 per cent, hopefully banks pass this onto lenders, which will help continue to improve the sales market and WA’s economy.”
