House rents stagnant but unit prices decline for first time since 2017 according to Domain
Perth has recorded its first stable quarter for rental prices in over a year; The average weekly cost of homes held steady at a record high of $700 per week.
Meanwhile, according to Domain’s September Rental Report, unit prices recorded their first decline since 2017; It fell 3.2 percent in the quarter to $600 a week.
According to Dr Nicola Powell, Domain’s head of research and economics, this was “a highly unusual result” for the state capital, as the vacancy rate remained at just 0.5 per cent; It was the same as a year ago. In a healthy rental market, vacancy rates are 3 percent.
“This is still a homeowners’ market, so this is an unusual outcome,” Powell said.
“What this tells me is that budgets across Perth are overstretched and the affordability ceiling has not only been reached but has been shattered.
“Tenants are screaming, ‘We’re fed up.'”
Rental price growth has far outpaced wage growth for several years and is catching up with the market as renters shift to more affordable suburbs, share houses or move back home, Powell said.
This reduction in demand is about to increase due to the federal government’s 5 per cent deposit scheme, which will further increase the number of people leaving the rental market.
“The impact of this plan will be significant for a city like Perth, where people have previously been locked into the rental market,” Powell said.
