REIWA says buying ‘a no brainer’ despite rising house prices in 2021 as WA rental market hits ‘crisis levels’

WA rental rates and house prices will soar next year on the back of a trifecta of market factors, according to the State’s peak real estate body, but even with the increase Perth will remain the most affordable capital city to rent in. Perth rents will probably increase 10-15 per cent throughout next year and house prices 6 to 10 per cent because of strong demand, record low interest rates and the return of confidence to the real estate sector. That’s according to the Real Estate Institute of Western Australia’s 2021 outlook, released today, which hopes the positive outlook for the Perth rental market will attract more investors seeking to capitalise on the favourable conditions. But the initial circumstances are less positive for renters — REIWA said Perth’s rental market had reached “crisis levels”, with the vacancy rate falling below one per cent “due to the flow-on effects of COVID-19”. President Damian Collins warned the market could get more competitive at the start of 2021 due to an expected increase in the number of people returning to WA from interstate and overseas. Some people are so desperate for rentals they are offering to sign on for 24-month leases, according to real estate agents. Mark Hay, owner of East Perth-based Mark Hay Realty Group, said about one-in-five tenants was offering to sign for longer, while about one-in-15 was signing two-year leases. “People are trying to make their applications look far more appealing,” he said. “They want to lock the price down lower because they can see it will go up dramatically after the COVID scenario, and by taking a two-year lease they will be insulated from the market gyrations to a degree.” Mr Collins said the State Government’s moratorium on tenancy evictions, which ends in March next year, would result in “short-term pain” from rent hikes but eventually help free up stock and bring back investors. He said that with interest rates likely to be nailed to the floor for years, REIWA was expecting many families would find it cheaper to buy rather than rent. “It’s becoming almost a no-brainer — if you can afford to buy... you will be a lot financially better off and having lower mortgage payments than your rent payments will be,” Mr Collins said. According to REIWA, rents in WA have risen 8.5 per cent over the past three months, pushing the median rent from $350 to $380 per week. “We can expect rents to grow an additional 10 to 15 per cent throughout 2021, however, even with this increase, WA is still the most affordable capital city to rent in across all Australian States and Territories,” Mr Collins said. ANZ’s Stateometer report for the September quarter, released yesterday, tipped Perth rental prices to outpace other States in 2021. Economists forecast 12 per cent growth for WA year-on-year, compared with a national rise of 9 per cent.

REIWA says buying ‘a no brainer’ despite rising house prices in 2021 as WA rental market hits ‘crisis levels’

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