According to figures released by the Real Estate Institute of Western Australia (REIWA), “The vacancy rate has jumped from 4.5% to 4.9% – or more than 8,100 homes.”

The housing market has been very steady on properties for rent in Perth in the previous years. Nowadays, Perth is one of the cities which housing market bubble. The demand is too low, lot of new rentals every week but unable to find a tenant. Diminishing mining in the city influenced the market to subdue. Population growth has slowed down because of the slump in employment. Building boom is partly to blame in the increase in rentals because vacancy is out of control and affordable. The number of rentals in Perth has jumped by almost 1/3 and owners and investors should be updated for the rental property in order to meet the market. Real Estate agents should evolve their own techniques to make buyers and renters rush around every home viewings and secure the property. Things are getting quite and a rental vacancy is likely to increase. A rental vacancy in Perth is almost approaching record numbers. Due to high supply, lots of properties are empty and available for tenants.


Tags: Rent Vacany

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The Western Australia market has definitely slowed down and there is a no interest rate cut. Mining is one of so many reasons why the market slowed down. Migrants fall and population growth dropped that caused the market declined. But it is just a confidence thing on how to jump back in the ring despite the slowdown.

According to Organization for Economic Cooperation and Development, “They forecasting a 3% growth in our economy next year, thanks to a rise in investment in the non-mining sector and exports, it feared the strength of the country’s property market could result in “sharp connection” in house prices.

Fortunately for Western Australia, mining is not the majority to all regions but there is much more than mining, hence there are a lot of natural resources industries. Despite  the rising vacancy rates that about to oversupply, demand to house are slowly returning to realistic in some region especially in Perth. The more expansion in construction it makes the state could possibly showing optimistic signs.




Despite the slow market this year, Investors and homebuyers should brace themselves as the market remain solid. The market was enjoying healthy gains in 2012 and 2014 but in 2014, there was an awful performance and continues this year. Western Australia especially in Perth is still suffering of weakening economic activity. Continued low interest rates and an economic recovery will eventually start to let the renovation’s market.

According to Domain’s Andrew Wilson, “Rising unemployment and lower economic growth, driven primarily by the decline in the resources sector, are impacting housing market activity. Despite this, the local Perth economy remains relatively well placed compared to most other state companies.

Perth has softened but it is still performing a lot more strongly than the mining regions. These are a lot of opportunities for investors especially to those suburbs close to the city. Many apartments and houses are oversupply that secure tenants to have an affordable residence. Rate cut helps to have positive effect in stimulating the market.

 

 


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“Bad tenants rack up $31m bill” was the West Australian’s recent headline – see https://au.news.yahoo.com/thewest/wa/a/27576259/bad-tenants-rack-up-31m-bill/.

The headline figure is the total amount owed by public housing tenants for unpaid rent, water bills, and damage to property, and is no surprise to anyone involved with rental property.

The startling news is that Homeswest stopped collecting bonds from new tenants from July 1, 2013.

No tenant bond means no initial recourse for unpaid tenant bills, hence the debt will continue to climb.

Think about the normal potential tenant qualification process – in essence we are asking this question of potential applicants – will you be able to pay the rent on time, and maintain the property?  All our varied enquiries are designed to answer those two questions.  Now compare it to my impression of how things work at Homeswest:

1. Employment – no job?  That’s okay.  You do have a job?  Don’t earn too much, or you will lose the house.

2. Reference checks – I have personally been involved in the management of over 1,600 tenancies, and have never received a request from Homeswest for a reference check.

3. Bond – no money for a bond?  Fine, that’s not a problem.

Now lets remind ourselves of why we collect a bond from tenants in the first place:

1. Demonstrate Savings Ability – if someone cannot save four week’s rent, they are unlikely to be able to continue to pay rent for 6, 12 months or longer. A tenant must pay that rent despite job loss, family problems or surprise car repairs.  Remember that a tenant is responsible for other costs besides rent, like water bills, utility bills, and damages.  If a tenant accidentally smashes a window, they will need to come up with $600 quickly for the repair.  Owners need financially-responsible tenants, and saving for a bond is a simple assessment.

2. Protect Against Final Inspection Damage – it is normal for there to be some property damage when a tenant eventually moves out.  A cracked floor tile here, a broken window there, it is all part of living in a property.  Tenants are responsible to reimburse owners for the cost of property damage (but not wear and tear).  The tenant bond is the intended method of payment for those damages.   But if there is no bond present, then the owner will need to ask the tenant for payment.  But the tenant has just moved into a new property and has all the costs associated with moving (including possibly paying a new bond).  It is unlikely that the tenant will have spare cash to pay for damages.  Hence in anticipation the bond is set aside at the start of the tenancy.

3. Create an Incentive for Good Conduct – the tenant knows they have paid a bond, and wants to get it back in full.  Good property managers want to give the full bond back to the tenant, and will help the tenant during and after the tenancy to keep and return the property in good condition.

The consequences of Homeswest’s no bond policy are obvious:

1. Financially-irresponsible tenants placed into properties.

2. No tenant incentive to maintain the property.

3. Homeswest will have to pay for repairs at the end of the tenancy, and then chase the tenant for payment.

What I would really like to see disclosed is the write-off amounts from HomesWest – in other words, how much debt is written-off, or effectively never collected?

What could Homeswest do to improve the situation?  Here are a couple of options:

Easy – require tenants to always pay a bond, and use the Homeswest instalment payment method whereby tenants pay no money up front but can pay it off in affordable instalments.

Medium – require full bond paid upfront – note the private market provides a number of funding solutions to help potential tenants pay their bond.

Hard – stop the public housing program.  There is a glut of rental properties in Perth at present, and the private market is completely capable of housing everyone.

Adam Bettison


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