Perth’s rental crisis shows no signs of abating.
But what can we, as property managers and real estate agents, do about it?
At Rentwest we believe that as a sector we can do a lot more than we currently are. And our Director, Suzanne Brown, was involved in roundtables, to help to develop a plan to do just this with the Real Estate Institute of Australia (REIA).
REIA recently unveiled the resulting Property Management Action Plan (PMAP): a blueprint aimed at addressing the challenges facing the property management industry, including housing availability and affordability.
On launching the plan, REIA President Leanne Pilkington said the past year had shown property managers have a role “in ensuring the vitality and accessibility of housing for Australians nationwide”.
“Our action plan is not merely a set of objectives but a commitment to transformative change, addressing the sector’s challenges head-on and meeting the needs of renters, investors, the labour market and our businesses,” she said.
How the PMAP will address the housing crisis
In compiling the PMAP, REIA noted the rising cost of living and increasing challenge of entering the property market were encouraging more people to rent for longer. This was causing pessimism, especially among young Australians, with only 63% of Gen Z believing they were likely to ever own a home, despite 93% saying it was their ambition.
REIA also observed that the crisis was being driven by a lack of supply, with too few properties available across the country – although the situation is most acute here in Perth. In fact, as we recently reported, the vacancy rate in our city has now fallen to 0.4%. That means, for every 1,000 investment properties across our city, just four are for lease at any one time.
The PMAP wants to help change this.
Increasing housing supply over the short-term
We’ve often written about how Perth needs to urgently address the lack of housing in our city. As part of this, we’ve already stressed the need for in-fill development and expressed our view that the future of Perth’s CBD is residential.
However, given that it takes a few years for a new development to be approved and built, these are medium-term solutions.
REIA is focused on what we can do in a shorter time frame to help renters here and now, and it has come up with a few ideas in the PMAP.
First, it wants to lobby governments to reform the restrictions around granny flats. Here in WA, we’re actually well along this path, with the state government instituting reforms that allow granny flats of up to 70 square metres without the need to seek permission.
Next, it will encourage the government to offer tax breaks to property investors who offer properties for affordable housing. This is an important one, because we don’t just need more housing – we need housing people can actually afford. Already, WA developers receive a transfer duty discount when they build to rent. However, REIA’s proposal would take this much further, to include established properties rented out by private investors.
REIWA also wants to encourage small-scale investors to invest in the local market, including ‘rentvesting’ – which it sees as a potential way for people to enter the property market for the first time.
We recently wrote an article explaining the pros and cons of rentvesting here in Perth.
Promoting the benefits of property investment
REIA believes that real estate investors are sometimes unfairly maligned for taking away housing stock from first-time home buyers. However, the flipside—that they also provide much-needed accommodation to the rental market—often gets overlooked.
With too few rental properties available in Perth, we need to be doing what we can to increase supply. That includes encouraging further investment.
For this reason, REIA wants to work with governments to encourage private landlords by driving strategic and positive messaging around the benefits of property investment as an avenue to home ownership. For instance, if a first-time buyer cannot afford a home in which to live without assistance, they can add to the rental supply by renting all or some of their property out.
REIA also argues that APRA’s serviceability buffers for property investors are unfair when compared to those for owner/occupiers. It would like to see these reduced to boost borrowing capacity and encourage people to invest in property.
REIWA notes that developers—often overseas-based ones—are responsible for building much of the new housing stock that adds to the rental supply. To this end, it would like to see the removal of some of the restrictions to foreign investment, such as higher stamp duty charges and barriers to institutional investment in housing.
Promoting the work (and wellbeing) of property managers
Finally, a lot of the PMAP is devoted to helping improve the profession of property management, so that we attract great people and keep them here, helping investors and landlords.
We were delighted that our Director, Suzanne Brown was invited to present to the PMAP roundtable on Rentwest’s Four-Day Work Week trial as a way to encourage people to enter the sector and keep them happy and productive.
Want more?
The solutions to our rental crises are multi-faceted and challenging. However, REIA and the real estate sector believe we have a real opportunity to play a positive role in helping improve the situation for thousands of landlords and tenants.
Are you looking to invest in Perth real estate, rent out your Perth property or find your next Perth rental home? We can help. Get in touch with our specialist Perth rental team today.
