Perth landlords are being encouraged to leverage current market conditions in order to create new pricing benchmarks for when COVID-19 restrictions are scheduled to end in March 2021.
The property managers behind one of Perth’s largest apartment rental portfolios, M/Property, said current market conditions were optimal for landlord-led negotiations, with the industry forecasting a possible 20 per cent increase across the rental market.
While tenancy and rental freezes as a result of COVID-19 have helped to push occupancy rates to an all-time high, the group said the impact was likely to be ongoing as the market opened up.
M/Property Real Estate Agent Kiarna Blythman said the industry had not seen this level of activity in 14 years and believed the environment had given investors a chance to review and reset rental prices after a long period of stability.
“Instead of negotiating rents down, applicants are now offering up to $50 a week more than the asking price to secure the property they want,” she said.
“We currently have just one apartment available and eight coming onto the market, with a waiting list on our database. This is in vast contrast to our typical pipeline of 20 to 30 apartments and has given us the opportunity to negotiate a new level of revenue for our owners to lock in fresh agreements that benefit the landlord.”
According to REIWA data, limited stock and increasing population have driven median rents upwards, effectively putting more pressure on the market.
For the week ending December 6, only 2934 properties were available for rent in Western Australia, two per cent higher than the previous week but 51 per cent lower than the same time in 2019, with the rental vacancy sitting at 0.95 per cent.
“We are very aware some landlords have been disadvantaged by the COVID-19 policies and have been unable to evict tenants or review rents,” Ms Blythman said. “However, as the deadline for restrictions will soon be lifted, now is the time for landlords to take action.
“If property owners are successful in increasing weekly rent prices in a time of extraordinary demand, there is a strong possibility their actions will help to adjust pricing benchmarks for the long term. The accelerated pace and total sum of these price shifts may be difficult to achieve when the market opens up again.”
Emergency residential tenancy laws were introduced in March 2020 and extended until March 2021, putting a freeze on rent increases and evictions.