Newsroom
Perth rents could hit $400 mark by year-end
Date Posted: 12/03/2008
A leading property expert predicts tenants could be paying $400 a week for a typical Perth house by the end of the year as a new national report reveals, the city’s rents are increasing at the nations highest rate.
Gavin Hegney, chief executive of WA’s Hegney Property Group, said tenants who had already seen their rents increase substantially could expect to be hit with further increases of up to $70 a week because strong demand for rental properties showed no sign of abating.
The median rent for a three bedroom Perth house soared 22.2 per cent in the year to December to $330 a week, ahead of Sydney at $310 a week, according to the latest Mortgage Choice/Real Estate Institute of Australia market facts report.
Perth led the nation in the December quarter with a 6.5 per cent surge in rents, compared with Sydney on 5.1 per cent and Canberra on 5.7 per cent. Melbourne figures were not available when the report was compiled. While landlords may be rubbing their hands with glee, the buoyancy of the market means that tenants have been forced to shell out an extra $60 a week in the past year just to keep a roof over their heads.
It was a similar story in Perth’s apartment sector. The median rent on a two-bedroom unit increased by 20 per cent to $300 a week in the year to December, comfortably ahead of price increases in every other capital except Darwin.
The Real Estate Institute of Australia said immigration, uncertainty about interest rates and the increasing cost of buying a home were all likely to add to the pressure on Perth’s rental market throughout 2008.
The peak real estate body forecast vacancies would fall to below one per cent by the end of this month, down from an already tight 1.6 per cent in December.
Mr Hegney said the tightness in the market would eventually put pressure on Perth house prices, ending the current flat patch.
REIA president Noel Dyett said investors were set to benefit from the current state of the market. “Annual yields of between 2.3 per cent and 4.8 per cent have some way to go until they are truly competitive with alternative forms of investment,” he said.
Perth topped the list for the average return on property investment over five years, largely due to the 2006 boom, at 22.9 per cent.
However, interest rate jitters have taken their toll, resulting in a patchy market across WA.
Perth’s median house price for December was $465,000, the same as the previous quarter, though this was expected to be revised to about $470,000 as further sales data became available.
Residents in Kalgoorlie-Boulder enjoyed an 18.6 per cent increase in the median value of their houses over the year, while those in Mandurah and Bunbury endured declines of 8.7 per cent and 6.8 per cent respectively.
This story appeared in the West Australian on 12th March 2008 and written by Dawn Gibson.
