REIWA: Perth rental vacancies “approaching record numbers”

The collapse of commodity prices has sent rental vacancies in Perth to levels “almost approaching record numbers” according to the president of the Real Estate Institute of Western Australia (REISWA).

REIWA president told the ABC, “It will not be surprising to see the vacancy rate hit 5 per cent shortly, which means there are a lot of rental properties sitting empty and available for tenants.”

According to the REIWA, some 8,100 rentals are currently vacant and extra stock is flooding the market at a rate of about 150 properties a week.

This has forced rents down by up to 20 percent and Mr Airey says landlords need to adjust to these new market conditions.

» Perth rental vacancies spike as property market continues to struggle – The ABC, 25th June 2015.


  1. Things are getting quite dire out here and the boom is still in the tail end! The state govt is now begging to give away any crown land if the price is right and jobs are incredibly hard to get.
    Pass the popcorn it is going to be an interesting ride!

  2. These 20% decline in rents is going to create problems with property investors unable to make full ‘interest only’ payments. The banks will only put up with so much when it comes falling behind in payments and will soon start calling in loans.

  3. Crikey, scary numbers, rents falling up to 20% and 150 extra properties coming on the market per week. Even if the rent falls only half that, it would ‘scare the horses’, but with all that rental stock building up as well ? On the basis that not all those landlords would live in PER, a brief report from ADL. Although I have not made empirical notes, I have just got the feeling that the property porn articles on Adelaide Now seem to have increased the last 2-3 weeks. One day last week there where 3 on view, and the usual suspects/subjects. Suburbs where prices have increased, the ADL area that turns the most profit, and one about brothers and sisters teaming up to buy together with a nice touch from REISA saying lots of parents can help with that as well. C9 ADL also ran article, of which although I saw the ad I decided not to watch about the dreaded Chinese coming to ADL to buy our existing property and streets, which came across as a clear spruik via Toop and Toop boss as a FOMO fear campaign (they are desperate it seems for some of that east coast action). I then ‘accidently’ saw the Current Affair property porn article tonight on FHB’s building property portfolio’s. Thus, I just get the feeling things are a little nervous at the moment, and more so compared to a few years ago. But as many readers here know, the gravy train had to slow (stop) sometime.

  4. It’s happening in Perth and Brisbane, of course it is, because they are both cities near the diminishing mining industry, but please tell me what have we got in Sydney that will precipitate a similar shift in the property market? I’ll be damned if I can tell.

    Rents here in Sydney are sky-rocketing and there’s no shortage of families willing to pay $1500 a week for a basic house that hasn’t seen a lick a paint let alone a new bathroom or kitchen for over twenty years! If you want a pool and a garage and some lawn in a good suburb, you’re not going to get much change out of $2000 a week. What is Sydney’s Achilles’ heel?

    No wonder shops are closing and businesses are making redundancies – no-one has any disposable income as it’s all going on rents and mortgages. I’m no economist, but you simply cannot rely on the housing market to keep the country afloat. It’s a bloody mess!

  5. @Skichaser. I’ve noticed the same thing, there is a strong correlation between property porn articles and a weak market. I notice when the Adelaide market is chugging along, the media is relatively quiet. When things start to get tough, all the TV channels start running property porn. I too saw the promo for ACA, but didn’t bother watching.

    BHP Billiton announced today the axing of 140 jobs, most from it’s Grenfell St Adelaide office.

    There is also speculation that Adelaide builder Tagara is about to go broke. Murray Bridge stubbies walked off the job today, after not being paid for weeks.

  6. Redundancies becoming common occurrence in WA

    Home prices still very high, I’d be nervous right now if i had a mortgage oer 100k here. Good thing I don’t have one at allm

  7. @ Rupert

    Sydney and Melbourne have rabid Chinese investors.

    They need to get the foreign investor cash flowing through Perth or it’s toast.

  8. Let’s not forget that any investing…stocks…real estate…bonds etc are simply just vehicles for parking money. The Chinese are simply parking money…their stock market is in a bubble…their property is on a bubble so why not come to Australia if you get a free pass. It’s not rocket science but it is hilarious how everyone in Australia believes they have made because they have a big mortgage. I dont doubt that bail ins are coming and yes Cyprus was a trial and now Greece and who knows what follows. Yes we have been sold out because our wonderful patriotic Government has sold us out…

  9. Gold Coast retail precincts not looking too good either. As jobs disappear house rents go lower and shops close. The rise of ghost malls in the US is becoming an epidemic and it looks like we will follow. Unfortunately many SMSF’s have invested heavily in commercial properties which will also end badly. I am interested in reports of mass retail closures in other areas as they are definitely the canaries in the mineshafts. Any to report?

  10. All I can repeat is that Sydney is covered with for lease signs. How did so many places become vacant so quick? And how are rents booming with so many properties to let?

    A while back admin posted “end of the for lease sign” and was right.
    Well there’s been a drastic change since then despite everyone walking around as if things are a-ok.

    The thing is, when people are shitting themselves financially, my 41 years and their pride says they’ll tell you the opposite. Better still in R.E, the hottest, best times are spruiked just before a…..

  11. I saw the ACA story last night, it was terrible. They showed a bunch of 20 something’s who had done nothing more than bought a bunch of properties. There was no real mention of how well any of them were doing from it all. I mean sure anyone can go and buy a bunch of houses but unless they are largely positively geared then nobody is going to be living on the income. There was slight mention that some of their properties have increased in value… but of course that is all on paper.

    The term property portfolio is rubbish, it should be changed to debt portfolio or loss making business portfolio for those that are negatively geared.

  12. Australia Post has announced that then will be laying off 1,900 workers over the next three years, and yet we are told by our useless politicians that our economy is going well and unemployment is only 6%, they must think we are all fools. I’d say the real unemployment rate would be closer to 14-15%.

    Given the non existent job security there is these days, you have to be raving mad to take on a mortgage in this economic climate.

  13. All government efforts and emphasis is on getting as many people as possible to rent while the emphasis to buy your first home is all but gone. This is what happens when we vote for the Labor/Liberal Party. We had one last chance for social and economic equality but as usual the voter placed their personal well being above that of the country.

  14. Real Estate agents have evolved their techniques to make buyers and renters rush around in panic in the 1 hour a week open house race. The crowd of buyers and renters rushes around in fear of missing the unnecessarily short time slots. Maybe its 12 people looking at 30 properties or maybe its 12 people looking at 6 properties, the crowd doesn’t know, and is too rushed to work it out. Are buyers and renters making decisions in a staged situation that creates unnecessary duress?

  15. @11 – admin has noticed a resurgence of the for lease sign in his area of Adelaide. Agents can’t even afford stakes, rather they are cable tying their corflute signs to the front security doors. Looks quite tacky. admin is now getting personal and unsolicited invitations from landlords to rent their properties!

    AFR published this today:
    Cooling rental market warning for property investors
    “Sydney, which has taken over from the mining capitals as the nation’s real estate boom town, is also beginning to slow from a surfeit of rental properties, which are expected to increase by more than 1000 a week between now and Christmas.”

    The article didn’t say what demand was, so it is hard to know what of the 1000 new rentals a week are unable to find a tenant.

  16. Just a theory!
    The housing market has been very steady on properties for sale and for rent in the Sydney area for the last few years!! Around two years ago, I downloaded the App to more look for changing trends in the market (I had already conceded property was out of control and unaffordable). The Sutherland Shire area usually has an average of 350 properties for sale or rent, of course it goes up and down at different times of the year. However, I’m taking a punt that there are some very nervous investors in the Sydney market, especially with the increased talk of a property bubble in the media. Most are negatively geared therefore are holding onto their properties until the end of the financial year to get the tax breaks.
    It will be interesting to see if July will show a big surge of properties on the market?

  17. @11 and @17 I have been looking for a rental property for 6 months!!! There is nothing out there that I would want to live in. Now, maybe my standards are too high, but in the suburbs I’m looking at there is NOTHING available, no ‘For Lease’ signs everywhere as you both allude to and certainly nothing decent at an ‘affordable’ price. The facts are that investors have over-leveraged and are being told by real estate agents that they can let their house for ‘x’ amount per week. And the market seems to be agreeing. All of the houses my wife and I have seen that we would even consider putting an application in for are snapped up BEFORE the first inspection. That’s right – before the first open house. Now, I say again, maybe I’m looking in ‘posh’ suburbs in the leafy North Shore, but that is what I want, that is where I have been living for several years, and I can afford it – BUT there is no rental stock out there. It is like tumbleweed. Fact!

  18. It is like 2011 all over again is this when bubble finally pops if it is, Christmas that is when people don’t have spare money. We may see an increase of properties on the market from now on.

  19. If people have little to no disposable income because they are servicing mortgages or rental payments, not to mention stamp duty and various insurance premiums, then they will spend less or nothing in the high street.

    If the high street receives no income, businesses will go bust and unemployment will rise.

    If unemployment rises, people will find it harder to service mortgages or rental payments. And more importantly tax revenue will go down.

    If tax revenue goes down, there is less money for the government to spend on helping those who are unemployed and can’t afford to service their mortgage or rental payments.

    If housing was affordable, and I mean relative to incomes, across the board, from the small unit to the large house with a pool, we would;t be in the bloody mess!

  20. The writing is on the wall for housing and the LNP knows it, with about 18 months to the next election that is a long time to prop it up.
    Labor and the Greens are aware that it is in its death throes and will subtly talk it down whilst not appearing to crash it.
    An early election would suit the LNP in my opinion whilst a downturn and a later election would decimate the LNP.
    Mining State downturns and spreading contagion will make politics really interesting.
    In saying that the death cult terrorist evil doers will be the focus for quite a while from our Prime Minister who appears to be the Australian version of George Bush.

  21. Well said Rupert @23 You only missed one point ….. and the banks would not make such BIG profits.

  22. @ Steve

    I think you will find that crashing the system is out of the hands of the politicians and will be initiated (under cover) by the banks themselves who have nothing to lose and every thing to gain from a full blown housing collapse. History is littered with examples of financial institutions causing collapses to gain control of competitors and governments.

  23. @27

    They’ll get busy as soon as they (and their buddies) sell every single last one of their properties for top dollar. Which I don’t think is far off (Hockey selling his properties must mean something…).

  24. Rupert – its called a ‘Seneca Cliff’….the bubble deflates far faster than it built via all the interlinking aspects as you point out that in combination drive the collapse. The Australian soufflé economy.

  25. @ Rupert…. I thought you said in a previous post, that
    you had locked in a 5 year rental agreement?

  26. On another site there is an argument about who deserves welfare, it is argued by some that home owners do not deserve welfare. But it is owners who will be hardest hit when it all falls down.

    The only question is when will the housing market, like the share market have a correction and fall.

    Like shares, any one over extended will take a massive hit, but it might be a good time to buy a few acres if you can work out the bottom of the market. Small house, large shed, some chooks etc, far enough out of town to be quiet.

  27. @Rupert, several years ago I was saying pretty much the same thing. The housing bubble was, I thought, unsustainable, and had to pop because of the all the reasons you give.

    However, I underestimated two things. One is the amount of foreign investment. The government is happy to get the stamp duty and fees, and they don’t care where it comes from. And as we know, a lot of Chinese investors are happy to leave their properties empty. When Rudd relaxed the laws to allow open slather on Australian properties I would never have expected this to go on for as long as it has without some sort of uproar, but now this is only going to double in the next few years. So this housing bubble is not reliant on Australians being able to afford anything. In fact, Australians are becoming increasingly irrelevant in this whole housing market.

    Secondly, while a lot of Australians are struggling with their mortgages or rents and other costs of living, you underestimate the amount of truly wealthy people. There are so many people who bought property when it was a fraction of what it costs now. Along the way they have amassed whole portfolios of property, superannuation and shares in their family trusts. And there are people whose inheritances are in the millions.

    When will the bubble burst? Who knows? But the way the government is so hell-bent on growing the population as quickly as possible, and selling off the country to Chinese investors as quickly as possible, I wouldn’t be surprised if this Ponzi scheme keeps going for a while yet, unfortunately.

  28. @md

    The stats do not show that Chinese investors are the problem as shown by the media. Most of the investors are local SMSF’s and individuals hoping to get a better return on their money (3% + capital gains) This has made Australia’s private debt level balloon out to 160% of GDP. The slightest downturn will likely wipe out most of the countries middle class who are massively over leveraged. As to timing according to Mme Lagarde IMF the the reset is likely to begin Sept/Oct 2015.

  29. @ Morpheus,

    “As to timing according to Mme Lagarde IMF the the reset is likely to begin Sept/Oct 2015.”

    Do you have a link to this? This time frame fits in with Martin Armstrong’s 2015.75

  30. I attribute the length of time waiting for the bubble to burst to interest rate cuts. During the GFC they slashed the cash rate to a record low of 3%, which was often said to be too low and just an emergency level. People rushed out and bought like there was no tomorrow and then rates went back to the normal level. People cried fowl when there was one rate hike on Melbourne cup day and saying it was un-Australian to do so, as if that is some sort of sacred day. With the cash rate at 4.75% the prices were no longer able to rise and started a slow decline that went on for a long time. At this point the losses for negatively geared infestors would have continued to mount and they were holding depreciating assets. Then all the rate cuts started to come in, like get out of jail free cards. Then of course the fools that have a ridiculous appetite for debt and money which isn’t theirs all pile back in. There is talk of rate increases eventually, I think that when that starts to happen we will see prices start to fall again. My question would be if the RBA will be willing to increase rates and watch the housing sector burn as a result.

  31. @ Gavaroo

    My link refers to the famous speech made by Lagarde of the IMF. As if things aren’t weird enough already in the finance world she comes out with the significance of numerology and the magic number 7 in world events. WTF, you couldn’t make this stuff up if you tried. Unfortunately it does tie in with business and religious cycles which many people believe in. Perhaps our financial leaders are crazier than we give them credit for.

  32. @ Morpheus

    “The stats do not show that Chinese investors are the problem as shown by the media.”

    That’s because stats are not properly kept or maintained. The FIRB have even said they have no idea of the amount of foreign investment. It really is a voluntary system – if foreigners want to disclose their purchases, it’s kept as a statistic. If they don’t want to, nobody comes after them.

    In addition, many foreign buyers buy through Australian proxies so you won’t see these come up as foreign purchases. Or they might send their children to study here and get them to buy properties. You won’t see this come up as a foreign purchase either. They are supposed to sell if the student goes back to their home country, but again nobody is watching, and no laws are enforced. The FIRB is the most useless government body ever.

    The ATO is now going after 195 illegal purchasers. They have admitted this is just the tip of the iceberg but in many cases it would take a lot of time and effort to follow the money trail. The government has put 60 people onto the case of finding tracking down illegal purchasers. That sounds like a lot of people, and it is certainly an improvement from nothing, but there are still going to be a lot of illegal buyers who get away with breaking the law.

    And the above is just about the illegal purchasers. Nothing is being done to deter legal foreign purchases; on the contrary, this is very much welcomed. The Chinese alone are set to spend $60 billion on Australian property over the next few years. Given that many of them could outbid any Australian, I would hardly call this insignificant.

  33. @md

    If you are correct about Chinese investments it is really good for sellers in that they mostly pay cash and when it all implodes it won’t impact as much on the locals. Also those that buy legally buy new housing which keeps workers employed and provides new rental stock. When the market does correct there will be a glut of foreign owned properties trying to sell which will further depress housing prices and allow the locals back into the market. A case of every silver lining having a cloud.(For foreign investors)

  34. @Rupert, the reason some areas like Sydney don’t have skyrocketing vacancy rates is that a lot of foreign investors are buying into the price appreciation. They don’t care about the rental income at all. The Chinese population is only just starting to learn about wealth management as they went from poverty to wealth in one generation. They are treating houses here like they treat the sharemarket back home, buy and hold. Renters will just wreck the place and increase maintenance costs. This is why Melbourne want’s to impose fines\tax on vacant properties to counteract this trend.

    The problems will quickly emerge when like stocks, price corrections happen. With no renters, holding housing stock is only meaning full if the price goes up. If it goes down, rampant selling will occur. Depending on who buys this stock, it might end up hitting the rental market, which then depresses rents, which impacts the profitability equation for all investors, which increases the rate of selling.

  35. @ JK,

    we have passed the event horizon. the great correction has started.

    bring it on.


  36. Morpheus,yes, it’s good for sellers when they sell way over reserve, but if they’re looking at buying again, they are buying in the same market that has been distorted by the Chinese buyers. Whether the Chinese are paying cash or not makes little difference to the seller.

    “Also those that buy legally buy new housing which keeps workers employed and provides new rental stock.”

    That extra housing is being bought by foreign investors. In some cases this provides rental stock, but in a lot of other cases they are left empty. The type of accommodation being built is not necessarily what people want. In any case, providing new rental stock – many of these renters would rather be homebuyers if prices were more not forced up by foreign buyers (and other factors).

    “When the market does correct there will be a glut of foreign owned properties.” We can live in hope, but again many of these dogboxes are not what Australians want. They are badly built and are the slums of the future. As for foreign buyers holding established properties, they are not likely to sell if their money is parked in Australian real estate to get it out of the hands of the Chinese government, or to gain residency here.

    Having said that, we are way overdue for a housing crash, and it is good to see articles of late predicting price falls, though the predictions seem to be on the law side, like falls of 4% or whatever. If there was a downturn, we can only pray we don’t get another Rudd who would pull out all stops to artificially reinflate the housing bubble yet again.

    We keep getting told that foreign investment is good for Australia because it increases the amount of properties and therefore keeps prices down, but this is the biggest LIE that anyone has come up with.

  37. @Rupert, spot on with regards to high house prices / rents killing the wider economy.

    This is EXACTLY what is happening in the UK (where I am from). We have exortionately high house prices/rents here (recent survey put UK rents as most expensive in Europe compared to wages).

    Guess what? The high streets are dying here. Businesses are struggling. Everybody is shopping at discount shops. Aldi and Lidl are doing well, Tesco/Morrisons/Sainsburys (middle-tier supermarkets) are all suffering. Nobody has the money.

    The UK government added an extra £500Bn of debt to our debt pile (£1.6 Trillion) in just the last 5 years, and they pretend we have had austerity (ha!), councils going broke, very low/no wage rises, zero hour contracts etc.

    We have a ton of property porn propaganda here too, all with the subtext of telling us not to miss the gravy train.

    Australia and the UK have many parallels.

  38. ‘This has forced rents down by up to 20 percent ‘. Diddums!

    I’m amazed they’re not calling for negative gearing to be cut now…… they keep telling us that’ll push rents up. Win Win!

  39. @48 – I’m also from the UK (been in Sydney for 3 years). I sold to rent (in London) at the top of the market in 2007 because I’d built up some really nice equity and I never thought prices would get as high as they were in 2007. I moved to Australia looking for a better standard of living. I have a great salary and a healthy deposit, and I still can’t afford to get back in the market – in a city that has the GDP of Houston Texas! However, I truly now believe that finally people are waking up and realising what mugs we’re all being taken for. Even investors will eventually realise that property is a bad investment. Prices will come down.

  40. @ Canbuywontbuy

    Read “The creature from jeckyll island”

    It explains why ALL developed nations with central banks have ballooning government debt.

    The goal is taxpayer bailout. They strip the wealth from individuals, then private companies, then banks, then governments, leaving the people powerless and broke in their own nation.

    Once again:”If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…I believe that banking institutions are more dangerous to our liberties than standing armies… The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

  41. Well said Matty. We may just be at that dangerous point now where Deutsche Bank collapses under the weight of its $76 trillion derivatives exposure triggered by the Greek Default. The banking system would have no answer to another Lehman Bros style event. So be prepared and get your cash out of the system.

  42. @48 and @50 the fundamentals of businesses suffering therefore the bubble has to burst won’t matter as long as the housing bubble is kept propped up. In London you have Arab and Russian billionaires buying up, and a lot of their money is corrupt. The rich English don’t mind so much because they’re selling for record prices. It’s the middle and lower classes who are losing out.

    Here it’s the same, but with the Chinese. As long as our government has an open door policy in regards to foreigners buying as many properties as they want, the bubble will be sustained. Everyone else (apart from the already rich) has to go without or get into enormous debt to compete.

    So as I said before, this Ponzi scheme could keep going for a while yet. Who knows, some external force could pop the bubble tomorrow, but on the hand it could go on for years. Locals are not needed to keep it growing.

    Ever since houses stopped being homes and started being speculative vehicles, the greed has become insatiable. In both countries, what the governments should be doing is closing the door to all foreign investment in residential real estate. Both countries should be putting their own citizens first when it comes to such a basic need as being able to buy a home.

  43. I bought 2 blocks late last year

    650k and 670k

    I paid less than what people were paying in 2008…

    With inflation that’s about a 30% fall.

    With rates it’s less than 1/3 my income.

    Sorry but if I had of bought in 2008 I’d be loaded up with a rubbish town house and massive debt for a crap block and old asbestos house with no views.

    Times have already changed.

    Anyone still winging there’s gonna be a crash needs to wake up. It already happened. Go get access to rewia and land gate. Buy access to the % price change over the last 50 years. Cycle is so obvious. Nows the time to buy if you can get in because Perth is about to follow Sydney. Always has.

    The low rates encourage everyone to want to sell and upgrade. Prices have already fallen and you can negotiate 5-10% off anything its easy which is 30-40% off the 2008 prices with inflation. Which is a ‘crash’ anyone stupid enough to think it’s going to ‘crash’ has no idea that it already has and it’s about to uptick next year most likely.

  44. @ 54. As noted by Upton Sinclair: “It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”

    The property fetishists in this country are getting shriller by the day…

  45. “With rates it’s less than 1/3 my income.”

    I assume you mean mortgage payments, not the actual costs of the blocks. It’s easy when interest rates are as low as they are now. What if they rose a percent or two?

    And if they are blocks, are you planning to build on them? If you building say, townhouses, and if Perth is going through a downturn now, are you planning to sell into a further downturn?

    You believe Perth is going to follow Sydney? When? Why?

  46. Unemployment and the imminent further loss of jobs through increasing use of automation and new affordable technology is finally going to burst this ridiculous bubble. Median income around $50,000, and median house price around $600,000. Just unsustainable, as anyone with a modest knowledge of mathematics would know.

  47. Hans better get building don’t want to miss out on making a nice profit as we go into our own recession. Jobs being lost all around wa.

  48. @54 Hans
    Anyone stupid enough lol….please buy another property u clown and then another one after that. When u retire please send me a copy of your book on how you made it….I would pay you thousands for a copy just to laugh. Oh yeah and please sign it . Another genius is born folk.

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