Perth rental crisis as vacancy rates drop below 1%

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on October 22, 2020
Perth rental crisis as vacancy rates drop below 1%

Photo by George Bakos on Unsplash

Perth's residential vacancy rate has plummeted to 0.96%, the lowest level in 13 years.

It's only the third time in 40 years the vacancy rate has dropped below 1%, with rents set to spike as a result. 

Real Estate Institute of Western Australia (REIWA) President Damian Collins said the rate could drop below the lowest ever recorded rate of 0.8% in March 2007. 

“With rental listings in Perth falling 8% to 2,926 over the month, we have certainly hit a rental crisis where tenants looking for a rental will potentially find themselves unable to find a home,” Mr Collins said.

“In addition, the reduced supply is putting upward pressure on rents with property managers on the ground finding increases in rent are occurring on new leases, as prospective tenants are in competition with each other to secure the limited supply.”

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of January 18, 2022. View disclaimer.

Perth typically sees an influx of investors in the Spring selling season which increases housing stock, but this hasn't been the case so far this year.

Mr Collins said if investors weren't encouraged back into the market the situation would only worsen. 

“Western Australia has approximately 17% of properties purchased by investors, whereas we would normally expect to see investors buying 30% or more of the available properties," he said.

"At the same time, we still have investors exiting the market, meaning the supply of rental properties is not sufficient to keep up with demand."

The Western Australian (WA) government recently announced an extension to the moratorium on evictions and rent increases until March 28 2021. 

Mr Collins said the government needed to ensure these provisions were not extended further so investors could feel confident in returning to the market. 

"The government needs to send a clear signal to the market that they have no intention of extending the legislation further if we remain relatively COVID-19 free," he said. 

"Otherwise investors will continue to sit on their hands and make a bad situation even worse.”

At the time of the extension announcement, WA Commerce Minister John Quigley said the extended moratorium was vital for the state's economic recovery. 

"Western Australia is entering a period of economic recovery, however with the threat of COVID-19 and a second wave still real, extending the rent moratorium protects WA renters and landlords, and helps create stability for everyone," Mr Quigley said. 

"For residential tenancies, low vacancy rates for rental properties have, and will continue to force rents to rise, and this together with the current unemployment rate, as well as changes to JobKeeper, means families may find themselves in financial hardship.

"To add difficulties in finding rental accommodation or not being able to afford rent to their worries would be an awful proposition."

WA joined every other state, except Queensland, in extending the moratorium on evictions. 


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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