Articles of interest

Perth vacancy rate lowest it’s been in more than two years

Perth’s vacancy rate has dropped to 5.3 per cent - the lowest since July 2015. 

REIWA President Hayden Groves said Perth’s latest vacancy rate for January 2018 had improved significantly since June 2017. 

“It’s quite remarkable to see it this low considering seven months earlier Perth’s vacancy rate soared to 7.3 per cent – the highest we have ever experienced, and now it’s back at levels last seen in 2015. 

“The vacancy rate is a good indicator for how the entire rental market is tracking, with data for February showing stable rent prices and declining listing levels. Leasing activity did drop off in February, however levels are still healthy and trending above long term averages,” Mr Groves said. 

The vacancy rate is compiled using data obtained from a monthly survey of REIWA members. The survey details how many rental properties members manage and how many of those are vacant. 

Mr Groves said there were a number of factors that had contributed to lowering the vacancy rate, such as an increase in population growth and a reduction in average tenure time. 

“Population growth in WA has started to improve. Rental markets always feel the effects of population trends, with new entrants into the state the first to soak up rental stock. 

“Tenants are also moving more frequently. In 2014 for example, the average tenure time was 45 months, fast forward to 2017 and it's now 34 months, which is almost a full year less. This has led to an increase in leasing activity which has driven demand for rentals and had a positive effect on the vacancy rate. 

“Another contributing factor is the reduction in the number of new dwelling commencements across the Perth Metro area. This has played an important role in lowering the vacancy rate. With less new dwellings coming onto the market, existing rental stock is now being soaked up, which is why rental listings have declined 19 per cent over the last year. 

“After a challenging few years for landlords and investors, it’s pleasing to see some parity return to the rental market, with tenants and landlords seeing benefits simultaneously,” Mr Groves said. 

At Time Conti Sheffield, we like to keep our customers and clients updated with relevant and timely information. To ensure your up-to-date with the latest information, we have provided a series of articles on property management and the real estate industry as a whole. Please contact us at our Victoria Park office for more information on anything you read here.

Property Management

Top Tips When Choosing a Property Manager

Once you have found the investment property that you intend to purchase, there are many things that should be considered for every property investor.

When thinking of appointing a property manager to manage your property, many property investors initially think that the fee is the first and main thing to take into consideration.

Of course, we are all price conscious these days and it would be unwise not to take your property manager's fees into consideration. However, when viewed in the context of the dollar value of the management fee annually compared with the sale value and capital appreciation of your property, a capable and professional property managers fees are a modest tax deductible expense.

All too often, property investors fall into the trap of appointing a low fee property manager with the thought that this is a saving. In fact is it false economy as there are a myriad of factors that must be considered when appointing a property manager. A low fee property manager may, at the end of the day cost you money through extended vacancy, the inability to train and be aware of industry trends and legalities and being unaware of how their actions impact your bottom line.

Before appointing a property manager, ensure these questions are answered:

  • Are they aware of prevailing market conditions and tailor lease terms to meet the peaks in the leasing cycle? A standard lease term my cost you dollars by ending at the bottom of the leasing cycle.
  • Has the property manager asked about your investment goals and expectations? A good property manager should be aware of your needs and expectations in for your investment to reach its full potential for you.
  • What advice have you been given about compliance and legalities that are imposed upon property investors before they lease a property? Not being aware of your obligations can expose you to legal action and compensation.
  • How have they determined a market rent and how often are rents reviewed?
  • Have you been informed what may need to be done to the property so you can realise its full income earning potential? 

When appointing a property manager, don’t dwell on fees. Look and ask questions about how the property manager can maximise your income and minimise the expenses of your investment property.

Courtesy of LPMA

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