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Perth landlords are being encouraged to leverage current market conditions that are allowing for significant increases in their rental returns, in order to create new pricing benchmarks for when the Covid-19 restrictions are scheduled to end in March 2021.
The property managers behind one of Perth’s largest apartment rental portfolios, M/Property, said that current market conditions are optimal for landlord-led negotiations, with the industry forecasting a possible 20% increase across the rental market.
They believe that while tenancy and rental freezes as a result of Covid-19 have helped to push occupancy rates to an all-time high, the impact is likely to be ongoing as the market opens up.
Kiarna Blythman from M/Property says the industry has not seen this level of activity in 14 years and believes the environment has given investors a chance to review and reset rental prices after a long period of stability.
“Instead of negotiating rents down, applicants are now offering up to $50 a week more than the asking price to secure the property they want,” she said.
“We currently have just one apartment available and eight coming onto the market with a waiting list on our database. This is in vast contrast to our typical pipeline of 20 to 30 apartments and has given us the opportunity to negotiate a new level of revenue for our owners to lock in fresh agreements that benefit the landlord.”
Based on REIWA data, the average apartment rental rates have leaped from $335 to $355 per week since the June 2020 quarter, with limited stock and increasing population effectively putting more pressure on the market.
“We are very aware that some landlords have been disadvantaged by the Covid-19 policies and have been unable to evict tenants or review rents. However, as the deadline for restrictions will soon be lifted, now is the time for landlords to take action,” Kiarna continued.
“If property owners are successful in increasing weekly rent prices in a time of extraordinary demand, there is a strong possibility their actions will help to adjust pricing benchmarks for the long term. The accelerated pace and total sum of these price shifts may be difficult to achieve when the market opens up again.”
M/Property specialises in the marketing and management of residential apartment leases and currently has a combined experience of some 50 years.
For more information visit mproperty.com.au