Rents fall as more opt to buy homes

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KATIE LEE - The West Australian

Real Estate Institute of WA figures show listings rose 18 per cent in the past six weeks to 4578 homes available last week compared with about 2600 last year.

REIWA president David Airey said the rental vacancy rate of 3.4 per cent for last month was above the 15-year equilibrium of 3 per cent. It was at 3 per cent for the three months up to last month.

The cause was a combination of economic downturn, shedding jobs, slower population movements and strong first-homebuyer activity as renters became buyers. This resulted in a significant rise in broken leases which pushed properties on to a slow rental market.

LJ Hooker WA regional manager Ken Preston said the heat had come out of the Perth rental market but history indicated the recent spike could be a seasonal adjustment.

Realmark managing director John Percudani said rental prices and demand had stabilised. Before the global financial crisis, Perth's rental market showed high demand and big price shifts.

"During the crash there was an exodus of corporate and FIFO tenants, particularly in the inner city, and when the market recovered the same cycle began again in response to increased mining activity," Mr Percudani said.

In the September quarter, the median rent hit $470 a week but this has eased with more listings.

REIWA data shows the median rent fell 2.1 per cent in the past three months with areas such as Fremantle, the western suburbs and Mundaring down 5.2 per cent, 5 per cent and 4.4 per cent, respectively.

Despite this decline, the metropolitan median weekly rent rose from $450 a week in November last year to $460 a week last month.

Mr Airey said for owners, the higher vacancy rate meant understanding changed conditions and adjusting rents.

But it gave tenants more opportunity to shop around for a more suitable home at possibly a better price.