Published on April 18th, 2013
Better to buy than rent in Perth
As the population in Western Australia has almost reached 2.5 million people in 2012, the flow on effects of a growing population have been seen in the residential real estate market.
According to research from the Australian Property Monitors (APM), the weekly median rent for a house in Perth has reached $490 for the March 2013 quarter. This is a 4.3 per cent increase from the previous quarter, and a shocking 22.5 per cent increase year-on-year.
These sizeable increases in rental prices have lead to renters purchasing real estate instead of renting, as it can occasionally be cheaper.
State franchise manager for Elders in Western Australia Phil Melville stated that one of the main contributors to the large hikes in weekly rent is the increasing population.
"It's clearly a driving force – the rental vacancies are very, very low, and with the price of rentals it's actually cheaper to pay off a mortgage than to pay for rentals in many cases," said Mr Melville.
"So that is actually driving the market. More people are deciding to build to buy – basically there's a lack of rental opportunities and because rentals are quite high it's actually a better option for them to buy or build."
The rental market in Perth has remained at tight levels over the last few months, which has created a high rate of competition between tenants seeking to rent property.
This demand has then lead to an increase in weekly median prices, with Perth now ranking second in the country for the highest rental yields.
With current interest rates at a record low level, and housing affordability rates improving, a great opportunity has opened up for those wishing to purchase their first home and secure a long-term investment.