Vacancies soar in Perth home rental market

The Perth home rental market continues to provide plenty of choice for tenants but remains tough for landlords looking for renters.

Latest Domain data reveals that Perth’s vacancy rate for houses eased again over January, up from the 3.5 per cent reported over December to 3.6 per cent.

House vacancy rates have increased significantly over the past year, compared with  the 2.4 per cent recorded over January in 2014.  

Perth clearly remains the most tenant-friendly capital city for choice, with most other capitals reporting tight conditions and  chronic shortages of house rentals.

There are no signs of change on the horizon, with the  rental market set to remain problematic for landlords  and plenty of choice available for tenants looking for houses. 

The rental market for units is also reporting high and rising vacancy rates.

The January result at 4.1 per cent is up from the 4 per cent recorded over December and, similar to houses, is a significant increase from the 2.5 per cent recorded over January last year.

Most capital cities have notably higher unit vacancy rates than houses, reflecting the recent surge in new inner-city apartments.

The Perth vacancy rate, however, is only below Darwin and clearly above all the other capitals.

Baldivis, Butler and Balga are the suburbs with the highest house rental vacancies, with Perth, East Perth and South Perth offering the highest unit vacancies in January.

The end of the fly-in-fly-out workforce driven by the previous resources boom has clearly impacted demand for rental properties. High levels of new inner-city apartment developments have also acted to push supply well ahead of demand.

High and rising vacancy rates will also continue to put more downward pressure on currently falling rents – more good news for tenants and for first-home buyers saving to enter the market.   

Dr Andrew Wilson is Domain Group Chief Economist, follow him on Twitter @DocAndrewWilson