REIWA sounds 'rental crisis' warning as Perth vacancy rates drop again

Perth's record-low vacancy rate has dropped even further, prompting warnings from REIWA that the city is heading toward a rental crisis.

In just two months, Perth’s vacancy rate has gone from 2 per cent to 1.3 per cent – and is expected to keep dropping.

According to REIWA's weekly snapshot, there were 3097 properties available for rent in Perth, 52.2 per cent fewer available for rent compared to this time last year. In just one month there were 7.9 per cent fewer properties.

REIWA president Damian Collins jumped on the figures and said the state government's decision last week to extend the residential tenancy eviction and rent increase moratorium by six months could spell disaster for those looking to rent.

"Without any change in the policy, it’s feared that a rental shortage will quickly turn into a rental crisis," he said.

"Unfortunately, sitting tenants are unlikely to move or adjust household size as they are paying below-market rents. In addition, we are seeing an influx of people trying to find a new rental property in a market with a very low vacancy rate.

"Right now, investors are sitting on the sidelines due in part to the COVID-19 residential tenancy laws and by extending the legislation on all properties, it means investors are likely to continue to stay out of the market, which will further reduce supply at the worst possible time."

Mr Collins urged the state government to revise its policy to only help those still financially impacted by COVID-19.

A spokeswoman for Commerce Minister John Quigley said the government acknowledged landlords were being asked to be patient and appreciated their contribution to protecting the community.

“With high levels of unemployment, diminishing payments for JobKeeper and JobSeeker, extremely low vacancy rates with correlating rent increases and the ever-present threat of a further outbreak in the state, the decision therefore seeks to ensure ongoing stability and certainty for landlords and tenants," she said.

The spokeswoman highlighted several schemes aimed at helping both landlords and tenants ride out tough periods including the landlord hotline, residential rent relief grant scheme and a conciliation service run by Consumer Protection.

The conciliation service has had almost 1000 applications and finalised 541 cases, About 70 per cent of those cases resulted in the tenant and landlord reaching an agreement.

Commissioner for Consumer Protection Lanie Chopping said the message to tenants was that it was essential that they kept paying rent and it was a good time for landlords to build long-term relationships with tenants that will benefit them both beyond the emergency period.

Shelter WA chief executive Michelle Mackenzie said the vacancy rate was "shocking" but backed the state government's moratorium as the best way to stop a second wave of homelessness.

"The lower the vacancy rate, the harder it is for people on lower incomes to find a rental they can afford, it is absolutely critical to drive the recovery effort to keep people in their homes and prevent a second wave of homelessness," she said.

"We understand the impact on landlords, especially landlords that might have a mortgage. That's where we hope the banks come to the party in terms of mortgage relief."

She said both the state and federal governments needed to invest more in social housing to provide a safety net for the market.

On the sales side of the real estate market, despite fewer properties listed for sale compared to last year, property and land sales were significantly higher.

House sales were up 42.3 per cent compared to last year, while unit sales were up 68 per cent.

Land sales were up 131 per cent compared to September 2019, but in the past week they fell 34.4 per cent.