Rents start to rise in Butler as rental crisis continues

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Median rents are rising but also some renters in WA have been accruing debt while paying reduced rents during Covid-19. File picture

BUTLER is one of the suburbs where median rents rose during October as the number of homes available to rent in Perth continues to fall, according to REIWA.

In August Butler MLA John Quigley, who is also Commerce Minister said the McGowan Government was trying to have no evictions and no rent rises during the Covid-19 pandemic.

But REIWA said Perth’s residential rental market was in crisis, with a vacancy rate of 0.96 per cent and appeared to be worsening with October’s rental data showing stock levels continuing to drop and rents starting to increase.

REIWA president Damian Collins said the median weekly rent had risen by 3.8 per cent to $420 a week in Southern River.

This was closely followed by Armadale (up 3.2 per cent to $270), Butler (up 3.2 per cent to $320), Subiaco (up 2.9 per cent to $650) and Ellenbrook (up 2.9 per cent to $350).

“The median days to lease in October is the quickest it has been since April 2013, taking only 18 days, with agents on the ground reporting some properties are leasing within days of a listing going live on reiwa.com,’’ he said.”

Last month Mr Collins said the reduced supply was putting upward pressure on rents with property managers finding increases in rent were occurring on new leases, as prospective tenants were in competition with each other to secure the limited supply.

“Typically, during this time, we would see investors enter the market and increase stock levels however we are seeing low levels of investor activity.

Rentals increasingly hard to find in northern suburbs

“If investors are not encouraged back into the market, then the rental crisis will only get worse.

“Western Australia has approximately 17 per cent of properties purchased by investors, whereas we would normally expect to see investors buying 30 per cent or more of the available properties.

“At the same time, we still have investors exiting the market, meaning the supply of rental properties is not sufficient to keep up with demand.

“To entice investors back into the market and increase stock levels, we need to ensure that the emergency residential tenancy laws are removed in March 2021.

“The government needs to send a clear signal to the market that they have no intention of extending the legislation further if we remain relatively Covid-19 free.’’

Mr Quigley said in an effort to have no evictions and no rent rises during the pandemic period the government had introduced the protections for residential tenants.

This meant if residential tenants could establish they had lost income because of Covid-19 they could go to Consumer Protection (part of the Department Mines Industry Regulation and Safety) to negotiate a rent reduction but the amount by which the rent was reduced would accrue as a debt owing.

“What I’ve had to balance is for mum and dad investors – there’s so many who have bought a second house and they’ve still got interest payments,’’ he said.

Mr Quigley gave the example of someone paying rent of $600 a week and after mediation it was reduced to $400 the $200 a week will be accruing as a debt.

“Which will mean that at the end of the Covid period you will have that debt, which will be recoverable in the local court and you know when you are paying off a debt in the local court you can negotiate to pay it off at so much a week and all that sort of stuff.

“We can’t forgive the debt because many of the homes that are being rented are the second home or the investment property of mums and dads who have to pay interest to the bank.’’