The extended COVID-19 emergency period has now ended, which means the ordinary tenancy laws under the Residential Tenancies Act apply again. So it’s back to business as usual for residential landlords and tenants.
This means that leases can again be terminated, renewed, and rents can be increased. However, other things, like repayment arrangements will remain in place for 3 months beyond the end of the emergency period (or until the end of June 2021).
Will rent increase for tenants?
During the emergency period, rent increases had to be postponed. So now that’s no longer the case, we anticipate that rent will continue to rise, and that some landlords may ‘make up for lost time’ for not being able to increase rent during the emergency period.
REIWA put a bulletin out stating:
“Whilst it is inevitable prices will rise, WA tenants are still paying a lot less overall than their counterparts around the country.”
In fact, earlier last month, the Real Estate Institute of Australia (REIA) released their December 2020 quarter Housing Affordability Report which revealed WA remained the most affordable place to rent in the country, despite the state experiencing a rental shortage and record low vacancy rates.
Tenants may need to adjust to paying more for a rental property, with a correction inevitable over the next 12 months. The WA Government acknowledges this likely rent increase and has expanded the COVID-19 relief grant to assist Centrelink recipients facing rent increases, as well as some landlords experiencing tenant rent debt.
Low vacancy rates
Now the emergency period has ended, landlords and agents no longer need to put up with bad or intolerable tenants. We can now resume taking action for rent arrears or tenants not taking care of a property.
We also believe a surge of activity will occur in the rental market over the next 12 months, including:
- super low vacancy rates;
- the reintroduction of rent increases;
- and a larger selection of tenants to choose from.
How is the Perth rental market right now?
The ‘landlord’s market’ conditions, coupled with the prediction of strong capital growth for Perth in 2021, could draw more investors to the property market.
According to the latest Domain Rent Report released in January this year, Perth experienced the most growth in rent in the whole country last year, with a rise of 13.5% for houses and 12.9% for units. It’s the largest rent increase since 2013, and with vacancy rates dropping to just 0.9%, the tables are certainly turning towards a landlord’s market.