Perth rental vacancy rate drops to lowest level since March 2008

Property market conditions are shifting across Australia as regional rental markets tighten and outer-ring suburbs face mounting financial strain. In Western Australia, Perth's rental vacancy rate dropped to 1.6% in July, marking the lowest recorded level since March 2008. This contraction highlights a substantial imbalance between supply and demand within the capital's rental sector.

While Perth's rental market tightens, broader national property trends show that outer suburbs are increasingly driving market activity. Across the country, the pressure on households extends from the rental sector into home ownership. In outer Melbourne, debt collection has ramped up for mortgage holders.

Analyst Martin North, whose firm Digital Finance Analytics surveys about 1,000 homes a week nationally, defines financial stress as a household's spending being greater than its income. According to Martin North, households in multicultural communities are facing considerable financial pressure. Seven of the top ten Australian postcodes facing mortgage stress in Mr North's most recent monthly analysis were located in Victoria.

Aspirational migrants like Lea are at the forefront of Australia's mortgage stress crisis, financial experts say, with boom suburbs in Melbourne's fringe filled with owners struggling to make their repayments. Rachna Madaan-Bowman, a financial counsellor at South East Community Links, said she had seen an increase in culturally-diverse clients seeking help in the last six months. Ms Madaan-Bowman said she had seen people coming in and requesting assistance because there's that fear that if they don't act quickly, they're going to lose their house. Ms Madaan-Bowman said many recent migrants faced additional pressures when it came to paying off their mortgages. But there have been other hurdles, including well-documented issues of increased wage theft, insecure work and exploitation. Ms Madaan-Bowman said an over-complicated banking system, which was not easily understood by those with a limited grasp of English, had put some people at risk, and she said some clients were in debt to third-tier lenders who charged higher interest rates and had few, if any, hardship provisions.

For first-home buyers like Nishad Fulmali, the recent interest rate hikes have come as a shock. Mr Fulmali was among the many Australians who expected rates to remain low, following comments from Reserve Bank governor Phillip Lowe that there would be no hikes until 2024. He said many of his neighbours in a new estate near Melton were now battling to keep up with their repayments.

Will Johnson, Northern Territory local expert at Herron Todd White, said roughly 53% of homes in Alice Springs are rental homes owned by investors, surpassing the Australia-wide figure of 30.9%. Between the end of March and the end of July, dwelling values across the ACT housing market increased by 1.3%, going against the 1.4% decline across national dwelling values. Tasmania's regional market in Launceston and North East reported the most substantial gains in unit values in July, according to the latest market report from CoreLogic. Before COVID-19 took its toll on the economy, several factors indicted growth across the state's dwelling markets, particularly in the South East Queensland (SEQ) region, according to CoreLogic. Investor activity in the state has been on a broad decline this year, said Jarrod Harper, local expert at HTW.