There are currently over 1,000 properties for rent in the inner city area of Perth and this rental glut will force a growing number of property investors to sell their properties according to Troy Gunasekera, WA spokesperson for Property Club.
Mr Gunasekera said that Property Club has been warning on an impending rental glut in the inner city area of Perth for the past three years.
“This warning has become reality, with over 1,000 properties for rent in the inner city area stretching from East Perth to Subiaco and to North Perth.
“If you include South Perth this figures soars to well over 1,200 vacant
“It is no surprise that East Perth and the Perth CBD account for two of the top
four suburbs in Perth with the highest number of vacant properties.
“The massive oversupply of rental properties in the inner city area of Perth has been due to the recent boom in apartment construction in the area combined with the recent crackdown on 457 visas by the Federal Government as the inner city area attracts many of these short term migrants.
“The current glut of rental properties in the inner city of Perth is now having a major impact on the level of rent landlords can charge.
“For example, landlords who were getting $550 pw for a two bedroom two bathroom apartment in the inner city two years ago are now having to accept a weekly rent of just $330 to secure a tenant. That is a drop in the weekly rent of around 40% in rents in just two years.
“Property Club began warning our members back in 2014 not to buy an investment property in the inner city of Perth because of the huge number of new apartments planned for the area.
These apartments are now completed and there are simply not enough tenants to fill them at the projected rents developers promised back in 2014.
“With the big banks increasing interest only loans for investors to above 6%, the unfortunate reality is that there will be a growing number of forced property sales in the inner city area of Perth over the coming year as investment owners will be unable to finance their properties because rents will not cove r the mortgage repayments,” he said.
MEDIA CONTACT IS TROY GUNASEKERA ON 0417 132 732