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Perth Rents Rise Again in July

15 August 2012
Rents in metropolitan Perth have climbed further in the three months to July, up by $10 per week from June to a median of $440 per week.
 
The Real Estate Institute of Western Australia says this breaks down to a median of $450 per week for a house and $420 per week for a unit or apartment.   
 
The REIWA data also show that the vacancy rate across Perth remains tight at 1.9 per cent, due largely to population growth and limited housing stock.
 
REIWA President David Airey said it was unusual that the vacancy rate didn’t ease during the winter months which had traditionally been the case. 
 
“The equilibrium for vacancy rates across Perth sits at around 3 per cent, so the current rate of just under 2 per cent is a third below where it would normally be,” Mr Airey said.
 
REIWA data show there are 2,440 rental properties currently on the market, down from a recent peak of 3,708 properties listed during the first week of July last year.
 
“As the number of rental properties diminish, rents are being pushed up. It’s a classic case of supply and demand being driven by population growth and weak investor activity,” Mr Airey said.
 
Mr Airey said the growth in rents across Perth was causing a higher than usual number of people breaking their lease to exit a property.
 
“Some people are breaking their lease to move into a more affordable place if they find one, some tenants have a bought a home of their own to move into while many younger tenants might be returning to the family home to live with mum and dad,” Mr Airey said.
 
Mr Airey said there had been an increase in the number of calls to REIWA from both tenants and property owners asking about the costs involved in breaking a lease.
 
“Tenants need to understand that a lease is essentially a contract between two parties and leaving the premises before the agreed termination date is a breach of that contract. 
 
“The owner is entitled to be no worse off as a result of any breach by the tenant. They can claim from the tenant any costs, such as rent until the premises are re-let, the costs for advertising for a new tenant and any leasing costs that the owner has not had the benefit of using,” Mr Airey said.
 
“I can’t see this rental situation changing in the short term, particularly given that the market tends to pick up in spring. The bottom line is that our population growth is higher than the rest of the country and everyone needs somewhere to live.
 
“Hopefully the strong first home buyer activity will see many current renters moving into a home of their own in coming months, freeing up rental stock and helping to ease the vacancy rate.
 
“We may also see investors return to the Perth market in greater numbers now that the rental yield has improved, house prices have stabilised, interest rates are steady and demand for accommodation is likely to continue for some time,” Mr Airey said.
 
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