Perth's rental market post-COVID eviction ban

Discussion in 'Property Market Economics' started by Scaphella, 10th Mar, 2021.

Join Australia's most dynamic and respected property investment community
  1. Shogun

    Shogun Well-Known Member

    Joined:
    26th May, 2018
    Posts:
    2,856
    Location:
    Perth
    Rent was $300 wk in 2008 with inflation would be $375 wk today. No complaints in 2008.

    My tennants pay $275 a week. Pretty sure they won't like $300 or $325.
     
    Redwing likes this.
  2. DAZ79

    DAZ79 Well-Known Member

    Joined:
    29th May, 2018
    Posts:
    595
    Location:
    perth
    Rent controls rarely work.

    The question is what can be done to improve on a system that screws tenants once property prices start falling.

    Falling prices = less investors.

    We need two things. First, way more professional investors building BTR developments and less fickle amateurs. Second, a much larger social housing system to protect the poor.
     
  3. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,393
    Location:
    Sydney
    The problem in WA is more macro level in my opinion - and an issue with the boom-bust nature of WA's economy.

    With so much of the economy tied to the fortunes of resources companies - when resources prices are high, demand for property is high (and incomes are relatively high) - when resource prices drop, demand for property also drops (and incomes drop in relative terms).

    So WA's property market hugely overshot during the last resources boom - and then suffered for many years after the boom ended - leading to a massive lack of real estate investment during that period which is now coming back to bite.

    None of the other states have really had such highs and lows and so don't have the same issues - at least not to the same degree that WA has.

    A more stable economy would see a steady investment in new development which would avoid many of the extreme issues we see now.

    But I don't see that changing any time soon - resources dependence is fundamentally a part of WA and such a dominant part of the economics of the state, that these extreme cycles will continue I suspect.
     
    craigc, Damo93, charttv and 2 others like this.
  4. DAZ79

    DAZ79 Well-Known Member

    Joined:
    29th May, 2018
    Posts:
    595
    Location:
    perth
    You appear to be suggesting that the market is working elsewhere. It isn't. Not over East, not overseas.

    If you rely on private investors to meet community housing requirements ( or even come close) you'll be sorely dissappointed.

    If you disagree with this statement, i invite you to provide examples of cities with majority private owned housing that are meeting the needs of, in particular, households in the lowest income quintile. Can you provide an example.

    It seems to me that you have a misplaced faith in neoliberal policies ability to run a decent housing system.
     
  5. Propin

    Propin Well-Known Member

    Joined:
    7th Mar, 2016
    Posts:
    3,618
    Location:
    Perth
    No that’s not entirely true. If I chose to live in Qld over the past 22 years it was lower wages and both my husband and myself would need employment rather then a single income in WA. Previously we hade quite a few immigrants from other states move over chasing the $$$ and moved back when it dried up. 457 visas were a big thing also but probably more to do with politicians trying to cut wages
     
  6. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,393
    Location:
    Sydney
    I wasn't specifically referring to social housing - only to the broader rental market in general which works through simple supply and demand.

    Social housing aimed at the lowest income earners is a different beast.

    The COVID restrictions applied to the entire market - so it's not just the affordable housing market segment that is going to be impacted by lifting the eviction bans.
     
    Firefly99 likes this.
  7. Firefly99

    Firefly99 Well-Known Member

    Joined:
    24th Jul, 2020
    Posts:
    1,727
    Location:
    Qld
    I think everyone on here knows this. It’s the powers that be in the government that don’t, or do and won’t do anything about it. There will always be some people in a society who need significant support due to no fault of their own and Australia’s housing system fails many of them.

    Most if the conversation in here is not around providing housing to this market as it would very unlikely ever be profitable. Hence the government needs to provide this service.
     
    Simon Hampel likes this.
  8. Scaphella

    Scaphella Well-Known Member

    Joined:
    6th Jun, 2016
    Posts:
    535
    Location:
    WA
    Anyone noticed the huge amount of people requesting a rental on gumtree ? It use to be the dodgey squatters trying to lure unsuspecting landlords in now it’s every man and his dog...very sad.
     
    Damo93, Shogun and thatbum like this.
  9. DAZ79

    DAZ79 Well-Known Member

    Joined:
    29th May, 2018
    Posts:
    595
    Location:
    perth
    Well they wont do anything about it unless and until voters insist that they do.

    What’s interesting is that many have the mistaken belief that it’s a small minority affected by the market failure and the failure of Government to address it. When it really isn’t. Not only is it a big issue now its going to become an even bigger issue over time.

    Watch this space.
     
  10. Shogun

    Shogun Well-Known Member

    Joined:
    26th May, 2018
    Posts:
    2,856
    Location:
    Perth
    Facebook "looking for rentals" pages and comments on "news" articles have many stories. It is really sad. You can read the desperation. Single mothers running out of hope to find somewhere for their kids to live. Others being evicted just so owner can get full market rent. Others with good jobs and up to $700 a week still unable to find a house.
     
  11. icic

    icic Well-Known Member

    Joined:
    16th Dec, 2016
    Posts:
    1,109
    Location:
    sydney
    It is quite sad that people are getting evicted for not able to paid the raise. On the flip side, many investers made up of mostly your average mom and dad owners have been make a lost year after year with rents dropping as much as 40% and upto 30% of capital lost who felt that they finally be able to see the light at the end of the tunnel. I don't think the government should step in and deprive property owners of that. If they do intervent, the will be less people who wants to invest and more housing shortage is ensured. I think the government should provide assistance to make up the shortfall for those really needed it.
     
  12. Alex P Keaton

    Alex P Keaton Well-Known Member

    Joined:
    14th Nov, 2017
    Posts:
    496
    Location:
    Perth
    I got it wrong. It’s a $70 increase. Yippee
    phew

    up to $350 from $280
     
    Perthguy likes this.
  13. Firefly99

    Firefly99 Well-Known Member

    Joined:
    24th Jul, 2020
    Posts:
    1,727
    Location:
    Qld
    It’s the same on the SC. Not just people on low incomes but many many people. Even those with budgets of $1000 / wk can’t get a house because there are simply none left. People with steady and high incomes are camping in people’s backyards. It doesn’t have anything to do with landlords raising rents when it’s this bad. It’s a severe lack of supply.
     
  14. KB_

    KB_ Active Member

    Joined:
    1st Mar, 2019
    Posts:
    32
    Location:
    Perth
    I was in the same boat as the last category a few months ago, but perhaps visiting this forum helped with understanding the urgency that was about to come. We were on a periodical lease and our landlord put the house up for sale late Jan. A property similar to ours came up for rent at around the same time for 150% of our rent, so we knew we had to go.
    We looked at a few places for $700+ a week in similar areas and the sheer numbers at the opens were crazy, so we reset our thinking and started looking for a cheaper place we could offer over asking on. The next open we attended wasn't too crazy and we hung back and chatted to the agent, advising him that this is the house we wanted, and we would be putting an application in 10% over asking, and that we could raise our offer further if needed.
    We ended getting the place for the application amount, and I think the value of not having to stress in these even more trying times is worth more than any amount over an asking price.

    I guess this is just a long winded tale from the renters side, and I'm thankful I was armed with info gained here, and am now relatively stress free. I could only get a 12 month lease, even though we asked for 24, but that's pretty standard. We have obviously had to make compromises, but hey, roof over the head etc.
     
    craigc and Redwing like this.
  15. devo76

    devo76 Well-Known Member

    Joined:
    12th Jul, 2015
    Posts:
    96
    Location:
    Nsw
    Is this rental squeeze all over Perth?
    I have a 4x2x2 in Noranda and having a little trouble securing a tenant. Bit surprised considering the hype at the moment.
     
  16. Shogun

    Shogun Well-Known Member

    Joined:
    26th May, 2018
    Posts:
    2,856
    Location:
    Perth
    I am on a few Facebook groups. Lots looking for 4x2x2 reasonably priced.
     
  17. devo76

    devo76 Well-Known Member

    Joined:
    12th Jul, 2015
    Posts:
    96
    Location:
    Nsw
    I think its reasonably priced. Well presented but it does have a strong 80s vibe with the carpet and blinds.....but comparable to other properties in the area.
    My competition is probably newer builds on small blocks that are about $40 or more dearer per week.
    Not many 4x2x2 rentals advertised in my area so surprised it hasn't rented yet. I may bring forward my carpet/blind replacement to now.
     
  18. Patrico1966

    Patrico1966 Well-Known Member

    Joined:
    12th Jun, 2019
    Posts:
    410
    Location:
    North perth
    So what is your rental price per week then? I thought you would have mentioned that in your post.
     
  19. devo76

    devo76 Well-Known Member

    Joined:
    12th Jul, 2015
    Posts:
    96
    Location:
    Nsw
    Sorry was $500. Dropped to $480

    But i get the point your probably making. It if was priced right it would rent. and I agree and I'm sure it will shortly because I don't think its that far off the mark. I assume while high rental demand is Australia wide. Certain pockets must be closer to the average. Which is in contrast to what you read on the media about people completely unable to secure a rental.
     
    Last edited: 30th Mar, 2021
  20. Patrico1966

    Patrico1966 Well-Known Member

    Joined:
    12th Jun, 2019
    Posts:
    410
    Location:
    North perth
    I had someone for that right now, but they just texted me and said they had a place similar to yours in size and asking price and have taken it less than 20 mins ago.. Your rent price seems pretty good IMO especially for the size of the place. Noranda is a reasonably good location as well.
     

Buy Property Interstate WITHOUT Dropping $15k On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia