How is the Perth Apartment Property Market Changing in 2017?
Little has changed in Perth’s housing market since the beginning of 2017. Residential property values sit 6% below the same time last year, and sales over the Easter and ANZAC break have done nothing to buck this trend. Combined with the slow in population growth, the slew of newly completed residential properties seems to have continued to cause problems for landlords in and around the city centre, leaving the overall vacancy rate at 6.5% as of March 2017.
Rental rates have not improved
According to REIWA members in April, the number of properties available for rent is 6% higher than the same time last year and 2% higher than four weeks ago. We’re still seeing a lot of choice available for quality tenants, and many landlords are dropping rates to incentivise existing tenants to renew their lease.
Unemployment still putting the squeeze on
While the national unemployment level rose 0.2% from January to February this year, Perth saw a drop from 6.4 to 6%. However, the pain isn’t over, with many of those who were on mining high incomes struggling to make repayments on their homes. This will possibly see some selling their residential property and others renting their property out to help make those payments, further increasing the competition for tenants amongst landlords of Perth property investments.
Stricter loan conditions could be discouraging buyers
Since the beginning of the year there have been interest rate hikes from most of the big lenders. Add to this the tightened restrictions for interest-only loans and investors by ASIC and APRA, and things aren’t looking bright for many potential investors at the moment. This is likely to keep many renters from leaving the rental market and making their own purchases, which is some redeeming news for those already with a Perth property investment in the city.
Will the RBA change the cash rate change in May?
The cash rate has sat steady at 1.5% since July last year to bring back confidence. Many are predicting that the Reserve Bank will make no change to the cash rate in May 2017 prior to the Federal Budget release. Instead, it’s expected that any rise could come later in the year or even in 2018. Housing affordability is likely to be at the forefront of discussion this May, which could impact the Perth housing and apartment market over time.
As always, our Perth property management team is finding high quality tenants for our clients with executive and boutique residential properties. If you are looking for a professional management team for your residential property in WA, contact the Burgess Rawson team today.