Perth tenants should brace themselves as rising house prices, improving economic conditions and more newcomers to the state combine to force up rents this year, a leading property researcher says.
The latest rental report by Australian Property Monitors shows asking rents in Perth have increased in the first three months of the year.
The median weekly asking rent for houses in the metropolitan area is now $370, a $10 increase on the previous quarter and the first rise in more than a year, while units increased $8, to $358.
But with rising house prices, increased rents have not led to increased yields. The gross yield for houses is now 4.06 per cent, while units are yielding 4.62 per cent.
That leaves Perth ahead of only Melbourne among all state capitals.
APM economist Matthew Bell said he expected Perth rentals to increase a further $10 a quarter for the rest of the year, with a strong resources sector and population growth the driving factors.
But this was unlikely to be fast enough to maintain yields, which would drop slightly as house prices rose further. The median Perth house price is believed to have passed $500,000.
Really, the outlook for both rents and house prices is pretty strong,” he said.
“Yields will probably soften again, but historically they are at pretty good levels.”
Houses were usually bought by investors for capital growth, with units offering better yields, Mr Bell said.
Meanwhile, the Urban Development Institute of Australia said its own research showed a six-month delay in planning approval could add 7 per cent to the price of an average block in the metropolitan area.
UDIA WA chief executive Debra Goostrey said developers were doing what they could to ensure “affordable” land was being made available during a time of increasing prices.
“We also need the support of a fast and efficient planning approvals process to avoid costs associated with delays,” she said.
Her comments follow those last week by property researcher Terry Ryder, who said claims of housing shortages were a beat-up by property industry lobby groups.
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