Cotality real estate expert Tim Lawless believes Perth’s rental markets are broken but says the housing supply outlook has picked up with a solid upswing in approvals and a flow through to commencements.
Cotality Asia-Pacific research director Tim Lawless.Credit: Australian Financial Review
Speaking at the Urban Development Institute of Australia Western Australia housing market outlook event, Cotality Asia-Pacific research director Tim Lawless said the rental market situation is not unique to Perth and is being felt nationwide.
“I think anybody who’s renting or who might have children that are in the rental market would attest to this. It’s broken. Our rental market here is broken,” he said.
“So with vacancy rates as low as what they are, obviously we’re still seeing upwards pressure on rents.
“I think the fact that we’re starting to see a little bit of a re-acceleration in rental growth is a little bit surprising to me when you consider how unaffordable it is to rent.”
Lawless said higher established housing prices should help to support project feasibilities in the face of high construction costs.
“But costs are still rising and labour scarcity persists,” he said.
“If you look at dwelling approvals across the nation you will see that three states really stand out.
“Queensland, South Australia and Western Australia are leading the trend in commencements.
“But the national vacancy rate is around 1.7 per cent compared to the vacancy rate in Perth which sits at around 1.2 per cent.
He added that Perth unit prices have been consistently rising faster than houses since 2024.
However, only 17 per cent of commencements in Perth are in the high density sector which is among the lowest rates in the nation.
“Perth has had a solid and consistent outperformance against the national average since 2022, he said.
“But Perth is also showing a loss of momentum in growth rate since November.”
Lawless said housing values across Perth and other mid-sized capitals have pulled away over the past five years.
“However, there are still a lot more places that are more unaffordable than Perth,” he said.
Lawless said the lower quartile of the market is consistently showing a stronger growth trend due to stiff competition from first home buyers, investors and mainstream demand.
He added that the stronger regional markets tend to have a combination of liveability and affordability.
“We are also seeing many of the traditional mining areas like Karratha and Kalgoorlie seeing an upward swing,” he said.
“Investor demand remains strong and is overtaking subsequent buyers as the largest portion of housing demand.
“First home buyer activity has diminished to be roughly in line with the national average.”
Lawless also believes another rate hike is on the cards and expects it to come around August.
Most Viewed in Property
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: www.smh.com.au
