The latest market report from Mortgage Choice and the Real Estate Institute of Australia released this week paints a bleak picture of Perth’s rental market.
Vacancies have reportedly plunged to one per cent over the December quarter from a revised 1.8 per cent for the September quarter, and yields remain unchanged below four per cent.
Perth’s median rent recorded its fifth consecutive $10 per week rise, taking the median rent to $260, an increase of four per cent over the September quarter and 18.2 per cent since December quarter 2005.
REIA president Graham Joyce said the tight rental market and the anticipated recovery of yields would offer new opportunities to investors.
“While healthy economic growth, strong employment and low inflation are positive indicators for stable interest rates during 2007, a move from a low rent to house price ratio to a more balanced ratio is essential in attracting more investors back to the market,” he said.
On the home buyer front, home loan affordability in WA is now at its lowest point since March 1980, according to the institute, with 33.8 per cent of the family income required to meet average loan repayments.
WA experienced the largest decline in home loan affordability over the year, down 18.5 per cent, reflecting the escalation of the median house price to $450,000. A decline of 5 per cent was recorded in the December quarter alone.
Mr Joyce said all levels of government must address the serious issue now by reducing state property taxes and increasing concessions and the First Home Owners Grant.
