Perth weekly rents tipped to rise by 10% during coming year

First time investors who are considering buying an investment property to coincide with the start of the new financial year will benefit from rising rents during the coming twelve months according to David Hobbs, CEO of Professionals Real Estate Group.
Mr Hobbs said Professionals were now recording rental vacancy rates below 2% in a growing number of Perth suburbs.
“Historically, when the rental vacancy rate falls below 3%, weekly rents begin to rise and this is now occurring to varying degrees throughout the Perth metropolitan area. Professionals are now experiencing a severe shortage of rental properties in areas such as Rockingham, Joondalup, Stirling, Midland, Armadale and the Hills. Based on current low vacancy rates, Professionals expect weekly rents to increase in Perth by between 5% and 10% during 2011/12,” he said.
“These areas include Joondalup South (5.0%), Hills (7.6%), Rockingham/Kwinana (6.3%), City of Perth (5.6%), Fremantle (5.9%), Cockburn (5.3%), Stirling East (6.1%) and Stirling West (7.7%). The outlook for the rental market during the coming year remains very tight due to Western Australia’s surging population. This trend is underlined by the latest ABS population figures which show that during last year, the population in Western Australia grew by 2.1% which is the fastest growth rate in Australia. While Professionals expect rents to rise strongly during the coming year, first time property investors should be careful not to overcapitalise their property through renovations. Presentation is a significant issue for prospective tenants and areas such as internal paint, floor coverings and window treatments are very important. Even better quality light fittings can improve the overall presentation of a home. A few hundred dollars spent on garden care, for example, can also make the property much more attractive to tenants. With a limited budget, a new landlord can substantially improve the overall presentation of a home and quickly lease their property. The purpose of targeted renovations is to ensure that the property appeals to as many prospective tenants as possible. It is important to remember that your investment property is competing against other investment properties in the local area for tenants and the weekly rent as well as presentation of the property determining the quality and quantity of tenants who will want to live in your property. Targeted renovations of this kind will also reduce the vacancy rate by allowing the landlord to choose from a wider selection of tenants providing the rents remain competitive,” he said.
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