The call for restrictions on Airbnb and similar platforms regularly makes headlines as the rental shortage in WA and across the country continues.

REIWA CEO Cath Hart said targeting short-stay accommodation diverted attention from the broader issue, which was that WA needed a lot more properties.

“Short-stay accommodation such as Airbnb is only a relatively small portion of the overall housing stock, although it may be more prevalent in popular tourist destinations,” she said.

“A recent search of Airbnb showed about 700 properties available across WA so even if all these properties suddenly converted to the rental market, it would not be enough.

“And short-stay accommodation is not always suitable to be used as a long-term rental.

“For example, it may be a granny flat, self-contained apartment that is part of the owner’s property, an extra room rented out occasionally or even a property the owners occasionally use themselves and rent out at other times.

“Or it may be an eight-bedroom, four-bedroom luxury home that is ideal for groups of people looking for a holiday but unsuitable as a rental and possibly unaffordable as well.”

Ms Hart said REIWA’s modelling suggested about 18,000 to 20,000 properties were needed to compensate for the decline in the number of rental properties in the past two years and keep up with population growth.

“Investors experienced an extended downturn prior to COVID,” she said.

“The Perth median house rent price declined from $450 per week in early 2015 to $350 in mid-2017 and remained there for a year before lifting slightly in 2018. House prices also experienced a steady decline during that time. The vacancy rate was much higher than it is now.

“Although market conditions have improved, there have been over 19,000 rental properties removed from the rental pool since January 2021 as investors exit the market, either to take advantage of long-awaited capital growth, to use the properties for themselves or in response to interest rate rises.

“This significant reduction in rental properties combined with a continually growing population is what’s driving WA’s rental shortage.

“Delays in the building industry have also played a role as many tenants who took advantage of COVID building incentives are still waiting for their home to be completed and need to retain their rental accommodation in the meantime.”

Ms Hart said increasing the number of rental properties would take time and required support, particularly from government.

“Whether it’s at a local, State or Federal level, we have to ensure we have policy settings that encourage rather than discourage people from investing in rental properties. This could be local planning policies, fair and equitable regulations on rentals, or tax settings for negative gearing or capital gains,” she said.

“We also need policies that support development. WA needs about 22,000 new builds each year to replenish the market and we’ve fallen well below that over the past decade. That has contributed to the current situation with rentals.”

Ms Hart said REIWA welcomed the State Government’s recent announcement of an $80 million Infrastructure Development Fund to help local governments and developers offset the costs of providing water, sewerage and electricity services to new housing developments.

“These costs have been a barrier to new development and this assistance should help boost housing supply in Perth and the regions,” she said.

“The government has also been reviewing the planning approvals process, which will help encourage development.”


Sourced from REIWA