Why private rental sector is crucial to a healthy rental market

The importanceofindividualproperty investorsin a healthy, thriving rental market is frequently overlooked.

Some people suggestthatinvestorsarewealthy individualshoardinglarge numbers ofproperties. This is simply untrue.Theresearch shows thatmums and dads(with less than two rentals)are themostcommoninvestorsand that they utiliseproperty investment to help secure their future.

They also provide an invaluable service to the community supplyinghousing for tenants. Governmentsand their state-funded housingsimplycannotdo this job alone.

Without investors, tenants suffer

Property investors and the private rental marketareessential to ensuring tenants can find appropriate housing. Without investors, tenants sufferthrough higher rents and fewer properties.

The more property investors there are in the market, the more availablerentalstock there will be, the less competition tenants will face and the easier it will be to secure housing.

The last eight months have been challenging for the Western Australianrental market, which has facedlow levels of investor activity,a shortage of rental stock, record low vacancy rates and high demand from tenants.

Positive trends on the horizon

Pleasingly,there arenow signsinvestors arereturning to market.In early May, the Australian Bureau of Statistics (ABS) released datashowinginvestor financein WA hadsurged to a five year high of $462million in March 2021, which was up from$237 million in March 2020.

While we remain some way off the $1 billion figure WAexperiencedduring 2014, this is still a positive trend and one we need to continuetoachieve abalanced market.

reiwa.com data for May supported the ABS findings too, with listings for rent up 3.8 per cent in May and 7.4 per cent over the last three months.This is an encouraging trendin light ofthe ABS figures.

With activity from investors on the rise, we should hopefully seeacontinuedincrease in the number oflistings come to market in the coming months, which will go some way towards easing the states rental shortage.

Looking ahead

Moving forward, we need to ensurethe outcomes of the upcomingResidential Tenancies Actreview arefair and equitablefor all parties,so that property investmentisntdiscouraged and there isenoughavailablehousing stock in the private rental marketto keep up withtenantdemand.

Thinking of investing in property? Start your search today.

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