Vacancy rate is on the rise in Perth and it is a challenge for landlords.
As previously reported, the number of approved home buildings in Perth are lower than before. Housing construction used to be a strong feature of the Perth economy but the recent downturn in the mining sector has led to fewer homes being built. This leads people to conclude that with the loss of jobs and decreased household funds following the downturn in the mining industry, nobody was interested to invest in Perth housing.
A more recent report shows that vacancy rates in Perth are going up. Does this mean that people have already gone somewhere to find jobs or put their investments in other places beside the capital of Western Australia? According to Domain, Perth's vacancy rate for houses has risen from the 3.5 percent reported over December to 3.6 percent in January. This is a significant increase compared with last year's 2.4 percent in January. Perth is trailing behind Darwin, which has the highest vacancy rate at 5.3 percent among the rest of Australian capitals.
This is alarming because of the fact that new housing developments are lower than before. Moreover, it may look like renters have more choices in this situation but it could also mean that there might be fewer people willing to rent in Perth given its economic condition.
On the other hand, the increased vacancy rate may also be the reason that developers have opted to slacken construction.
But according to Domain, despite the increased vacancy rate and decrease in housing supply, the city still is considered the most tenant-friendly capital city for choice compared with other capitals. Ironically, there reportedly are no signs of change in the near future. The rental market will continue to offer more choices for the tenants, particularly for first-time buyers currently saving up, and headaches for the landlords.
