Perths vacancy rate is currently the lowest it has been in 40 years, which is why REIWA is calling for Western Australias political parties to commit to tackling the states rental shortage, if elected.
REIWA President Damian Collinssaid Perths vacancy rate was 0.9 per cent in January, marking the fifth month in a row it had been below one per cent.
WA is currently the fastest growing major market in the country. We are still one of the most affordable states, but urgentlyneed more rental stock to keep it that way.
Its vital investors are encouraged back into the market, so more vacant properties are available for tenants. This rental shortage will not go away without a significant uplift in private investmentin housing. REIWA is recommending two key actions to encourage investment in WA, Mr Collins said.
1. Short-term incentives to encourage investors
Healthy investment levels are essential to maintaining a fair and prosperous rental market.
Despite record low vacancy rates, investment activity remains subdued in WA. REIWA is calling on all parties contesting the election to commit to short-termfinancial incentives for lessors to help make investing in WA property a desirable option, Mr Collins said.
For example, introducing land tax rebates for a limited time would make investment more financially viable and reduce the costs associatedwith owning an investment property.
Based on a property valued at $500,000, and using the WA Governments online land tax calculator, REIWA estimates a two-year rebate for land tax would save the average investor $850.
Other statesare doing this, so there is no reason why WA, with a healthy budget surplus, shouldnt be taking these steps to encourage investors back to the market. In the Northern Territory for example, there is no land tax payable on investment properties, Mr Collinssaid.
While WA in an enviable economic position following our COVID-19 response, we are still competing with other states for the same investment., Mr Collins said.
2. Legislative reform to ensure a fair rental system for tenants and lessors
With the Residential Tenancies Act (RTA) currently under review, REIWA is calling on all parties contesting the election to ensure tenancy laws are fair for all parties.
The RTA underpins every residential tenancy across WA. This review providesan opportunity to ensure the legislation provides adequate safeguards for both lessors and tenants, Mr Collins said.
There are seven key recommendations the Institute is making as part of the review which we feel will help keep residentialtenancies in WA fair and balanced.
The recommendations are:
- Maintain the right to choose between a fixed or a periodic tenancy.
- Preserve a tenants and lessors right to end a periodic tenancy without grounds, if necessary.
- Encourage pets in rental properties without limiting a lessors right to determine the suitability of a property.
- Ensure compliance with current housing standards without creating additional red tape.
- Protect the interests of both tenants and lessors by requiring consent before any modification to the property is made.
- Resolve disputes quickly, fairly and efficiently.
- Maintain the current hardship provision for those seeking to break the lease.
Its very important that all parties are protected. Introducing unfair tenancy laws that disproportionally disadvantage lessors would disincentivise property investment at a time when WA is crying out for more rental stock. If investors are deterredfrom buying in WA, this will lead to the rental shortage worsening and higher rents for tenants, Mr Collins said.
