Mara Fox Property Editor From: The Sunday Times May 19, 2012
RENTALS in some Perth suburbs have almost doubled in 12 months, causing panic and “mania” among those looking for a home.
The median asking-price increases in some cases up almost $400 a week compared with the same time last year means property owners are reaping bigger rental profits while tenants struggle to pay extra to keep a roof over their heads.
Suburbs to record the greatest spikes in median asking rent included Burswood, up from $482 a week to $875 a week, and North Fremantle units, up from $500 to $800 a week.
In Churchlands, median rental asking prices leapt $290, from $700 to $990, according to new figures from property analysts RP Data.
The data comes after The Sunday Times last week reported Perth’s rental crisis was so severe workers and families were living in tents because they could not find a home or apartment, with metropolitan caravan parks at or near capacity.
They said the situation was creating a “manic” mood in the rental market as people who missed out on rentals became increasingly anxious about securing a place, often offering above the asking price.
As they missed out on successive rentals, there was a heightened fear of not having anywhere to live.
Independent property analyst and commentator Gavin Hegney said Perth conditions had changed rapidly as a result of of a continuing population influx.
“People moving into the state have tended to move into rental accommodation, hence the vacancy rate has very quickly dropped from 4.8 per cent to its current level of 1.9 per cent,” Mr Hegney said.
“When people miss out on a rental again and then again, they go in so much harder the next time it’s almost like a panic or mania.”
Median asking rents are determined on a minimum of 10 advertised rentals a suburb and the industry.
“In some areas there may have been higher priced properties dropped in the market, moving the median asking rents, and also some undervalued places coming up,” Mr Hegney said.
“But it would also be a reflection of a lot of corporate activity in the marketplace. Corporations, such as those in the mining sector, can pay significantly higher rentals with greater budgets.
“So for instance, they may come in with a budget of $1500-$2000 a week and say, ‘OK, we need 80 properties’.
“The corporate rental market would also probably say, ‘Let’s rent rather than use hotel rooms’. And for their professionals, they also like homes near schools.
“Burswood had a huge amount of rental accommodation when all the towers were finished, but its current median asking rent is probably a reflection of the fact that’s dried up.”
Mr Hegney said property markets moved in cycles and rentals were no different. He predicted the hot rental market would ease and reach a better equilibrium between supply and demand moving forward.
TWINS FLY BACK TO THE NEST
TWINS Bec and Hayley Genner tried for two months to “grow up and leave home”.
But spiralling rents and a shortage of vacancies mean they are back in the family home in Heathridge, living with mum and dad like thousands of other young professionals.
Bec, a research worker, and Hayley, a retail assistant manager, said they arrived at rental viewings only to be greeted by 30-40 other prospective tenants, some of whom appeared to be offering well above the asking price to secure the rental.
“Sometimes we didn’t even put in an application because we felt bad taking a home from families who really needed it,” Bec said. “We were looking at rentals of at least $450 a week. Even then you practically have no chance to get what you like you have to take what you can get.
“We were looking at the pets situation and all of the agreements you had to sign. We thought, ‘We can’t do anything in this rental, so why are we doing this?’.”
Hayley, who works full time, pays $50 board. Bec, who was only working as a casual while she finished her university degree, has been given a financial leave pass.
“Mum and Dad have been fine with it, they’ve been supporting us whether we decided to rent or buy,” Bec said. “Of course, they know we have to grow up sometime.
“My parents are pretty good. Of course, you can’t have your complete freedom.”
The sisters have decided the best way out of the rental crisis is to build their own home on a 500sq m block 30km north of Perth.
Their repayments will be about $490 a week but in the meantime their parents are putting them up a little longer.
“They’ve taken off the board for Hayley so she can contribute that towards the house,” Bec said. “Yes, they’re very sweet. But in the long run they are going to be getting rid of us.”