Low vacancy rates could signal investment opportunities in Perth

Figures recently released by the Real Estate Institute of Western Australia (REIWA) reveal low rental vacancy rates for the Perth metropolitan area – reflecting potential investment opportunities in Perth.

In the three months to February, vacancy rates for rental housing fell to 2.3 per cent – a change explained by REIWA president David Airey as a result of seasonally high demand and a drop in supply.

He said: “The fall in the vacancy rate is not surprising as we have seen the volume of property listed for rent fall 24 per cent since the start of the year, from 2,900 homes to 2,200 at the end of February.”

For the month-only reading for February, vacancy rates were down to 1.6 per cent – the lowest rate recorded for the area since the January quarter in 2007.

The numbers have put a squeeze on rental-seekers in the area, but the supply shortage could be encouraging for potential property investors in Perth.

Median rental rates for units, apartments, villas and townhouses increased by $10 to $390 a week, illustrating an opportunity to enter the market.

Perth’s north coastal region recorded even lower vacancy rates at 1.5 per cent for the three months to February, while the western suburbs remained steady at 2.3 per cent and Perth’s outer southwest corridor fell to 2.2 per cent.

The lucrative mining industry and increasing commercial opportunities may have a hand in the tightening rates.

Mr Airey explained part of the increase in demand could be attributed to new migrants coming to the region – a trend that has amplified since 2011.

He also reported an increasing trend towards choosing to rent rather than buy housing.

For those in a position to purchase property, the numbers may represent lucrative investment opportunities in Perth.

As the resource sector fully develops, economic activity in the state is likely to support continuous growth.

By Steve McKnight

Steve McKnight, the founder of PropertyInvesting.com, is a respected property investing authority as well as Australia's #1 best-selling business author.