The real estate market in Perth continued its downward decline this year.
Experts have pointed to the rapid reduction in migration due to the downturn in the resources sector as the key factor that saw housing prices plummet from a median of $547,000 in the March quarter to $535,000 as of 30 September.
With the tumbling house prices, we also saw falling rents. We began 2015 with a median of $440 per week. This price fell to $430 in the March quarter, $420 in June and $410 in August. Currently, the median rental price for Perth metro is $400 per week, with a vacancy rate of 5.7 per cent.
Despite the falls, Rentwest has managed to retain a significantly lower vacancy rate for its properties all year, currently sitting around 3 per cent.
As of 30 November, the number of available rental properties across the region has increased by 16 per cent to 9448. This means that tenants have an even greater choice in properties at significantly lower prices than we’ve seen in recent years.
While these falls have been difficult for property owners, we have also found that tenants choosing to break lease have been significantly affected. When a tenant breaks lease, they must pay rent on the existing property until new tenants can be secured. Finding new tenants has been taking longer because of the current market. We urge tenants considering breaking their lease to get in touch with their property manager before making any decisions.
Many experts are predicting that the market will continue to be subdued for much of 2016. Accordingly, it’s never been more important to be flexible about the pricing of your property. It is a much wiser decision to lease your property at a reduced price than allowing it to sit vacant for 4 to 5 weeks (sometimes longer). It is also best to retain property rather than sell in this market, with there being many finance options available with the low interest rates. Please get in touch with your property manager for advice on the rental market and an introduction to our finance partner Custom Financial Solutions.