Positive outlook for Perth rental market: Stock comes down, yields go up
Perth’s rental market may start to attract more investors, experts say, as gross yields continue to grow.
The Domain Group Rental Report, released on Thursday, showed that while rental house prices were down for the quarter and the year, yields were among the highest in the country.
Perth’s median weekly rental price fell by 1.4 per cent for houses to $350 per week, and unit prices held steady at $300 per week in the June quarter.
Despite this, yields for houses were up 1.3 per cent for the quarter and 2.3 per cent for the year – the strongest result in the country. Units also saw strong yields for both the year and the quarter, with only Darwin seeing better results.
Domain Group data scientist Nicola Powell said the strong yields could bring investors back into the Perth market.
“Perth is going to be one of those markets that investors may start to look towards; the gross yields are much better than Sydney and Melbourne,” Dr Powell said. “I think that we’ll start to see a change in investor’s behaviour – they’re going to start to look to other markets.”
She said unit rents had held steady for the past five quarters, another sign that the Perth rental market had started to stabilise.
Properties in the western and inner suburbs were doing particularly well, Acton Real Estate director Travis Coleman said.
He said a low level of stock in high priced areas, including Cottesloe, City Beach and Nedlands, was because of stronger sale prices in the area.
“They’re stuck in rentals because house prices have started to pick up,” Mr Coleman said.
Stock levels were higher in less desirable areas further from the city, including in the outer east and down the coast.
“Areas like Armadale and Baldivis – you’ll still find lots of stock and lower prices,” he said.
Dr Powell said stock levels across Perth had generally started to come down since the mass exodus at the end of the mining boom.
“I think we saw a lot of people who were leaving Perth, but rather than selling in a softening sales market, they actually decided to rent them out and hold on until the sales market turned around,” she said.
“I think now we’re starting to see them sell, which has created a level of balance in the rental market.”
New mining projects have seen people from the eastern states move back west, particularly those at an executive level, Thought Leaders Real Estate director Matt Travia said.
“People have been relocated to WA from Sydney and Canberra, and they’re renting at the $700 to $900 a week level,” Mr Travia said.
New Retirement and Aged Care Facility Breaks Ground
12 Jul 2018