Inflation has touched virtually all sectors of the world. The Australian real estate sector did not escape the effect of inflation, as house prices have skyrocketed. Most cities in Australia like Perth, have experienced price hikes in rentals in recent months. According to Barry Humfrey’s Geraldton, this recent development is a cause for concern about the rental crisis.
Rental Crisis – Rise in the Price of Rental Houses in Perth, Western Australia
According to Barry Humfrey’s Geraldton, Perth City has been experiencing a rise in rental problems. The rise in the rental crisis is made obvious by the town’s rental stock statistics. The statistics show it is below the last 12 years. Last month, the Housing Institute of Western Australia revealed that over 1600 houses were vacant for rentals. This can be compared to the low record of over 1500 houses that happened in late 2010.
Reasons for Rental Crisis
There has been serious pressure on house rent prices because houses are scarce to get. Barry Humfrey’s Geraldton stated that the weekly rental has increased from August till now. Barry’s wife, Mary Humfrey also expressed her concern about how difficult this is for renters. She further stated that it might get worse due to the construction challenges plaguing the construction industry. Initially, Barry and Mary Humfrey thought that last year was difficult for the housing sector. But this year, things got much worse than before. It is disheartening that some people had to apply for houses many times before they got one. That is to show how difficult it has become to have a roof over one’s head.
What the Government is Doing to Provide More Housing
The government is trying to eradicate the lack of accommodations in Perth, Australia. Over 20 thousand constructions are being carried out to reduce house shortages. However, the shortage of labor is deterring those constructions from being completed on time. Moreover, it takes time to build a single house, not to talk of rental units. However, the quicker these houses get completed, the quicker it will be for people to rent one.
Why the Demand for Houses Exceeds the Supply
The rate at which people rent houses is so fast that the demand exceeds the supply. On average, houses get rented within two weeks of being put up. In some regions, it takes less than that; sometimes it takes seven to nine days. In the sales aspect, some cities in Western Australia have recorded a less increase in the price of properties. This is a bit better than the Eastern sides as seen by the statistics given by some researchers.
Perth Rental Crisis Statistics
Nevertheless, some cities in Perth reported an increment of over 530,000 dollars in house prices. Another coastal city recorded an increase of 2.7 percent and above, totaling over 910,000 dollars. Similarly, a southeastern city in WA also recorded a rate of 2.6 and above, which is over 466,000 dollars. Additionally, South Perth rose above 2.4 percent to an average of over 1.5 million dollars in sales price. This is one of the reasons why Barry Humfrey’s Geraldton is speculating whether he should invest in Perth’s real estate market. The reason is that some investors have bought rental houses, expanded them, and rented them out. This has created housing opportunities for those who need accommodations.
And for those who wish to sell rental properties, Barry and Mary Humfrey have the following tips.
Tips for Sales of Rental Buildings for Business Purposes
Have a contract with the agent you use and make it formal: You and your agent should have a formal contract in place. It shows that both of you have come to an agreement and have a formal document as proof. Not only that, the contract indicates whether the agent is exclusively your property seller and their service charges. Additionally, it also includes the agent’s extra fees and the duration of their service to you. As a client, you have the right to suggest changes in the contract and negotiate the contract before you sign. But if you don’t understand the contract or have some doubts, you shouldn’t sign. Or you can seek legal help for better clarification to protect your rights.
The house must be mortgage-free: Pay off the mortgage before you reach a final settlement. No buyer will purchase a rental house that is not mortgage free. Else, it’ll take a long time to settle the sales of your house. Discharging a mortgage can extend for a long period so it’s better to start as soon as possible. You would also need to spend some money to discharge your mortgage.
Unfortunately, Perth witnessed a fall in the value of buildings put up for sale in the last month. The sales plummeted by 1.9 percent, a decrease that is lower than other decreases that have occurred. Therefore, this indicates that the rate at which rental prices are falling is becoming slower than before. Hopefully, the real estate market in Perth will pick up again and flourish like before. Barry Humfrey’s Geraldton also hopes that this means good news for real estate developers and investors.