Perth Property Market Update – April 2020 – COVID19 Impacts, RTA Changes & Rent Relief Grant Explained

In this jam packed Perth Property Market Update I go deep into the Perth sale and rental market to explore the impacts of COVID-19 and outlook ahead as well as the changes to the Residential Tenancy Act, the new Rent Relief Grant Package and some tips for how you can survive and be ready to thrive.


  • 1:40 Sale Market Update
  • 7:22 Rental Market Update
  • 10:20 Residential Tenancy Act Changes
  • 15:15 Rent Relief Grant Details
  • 7:16 Property Clock Timing
  • 18:03 Factors Affecting Our Market
  • 23:53 Tips to Survive & Thrive
  • 26:47 My Crystal Ball

Helpful Links

  • Residential Tenancy Act changes- COVID-19 – HERE
  • Residential Tenancy Act Changes More Info – HERE
  • Rent Relief Grant More Info – HERE

See the Transcription & Graphs here

Gday! Jarrad Mahon here from Investors Edge Real Estate, bringing you my latest Perth Property Market Update. It’s my first one for this year. What a lot has been going on too. I meant to come to you in March but I’ve been waiting and waiting for Residential Tenancy Act changes to be finalised and also waiting to see what the true impacts of this Corona Virus is likely to be.

Hasn’t it been a crazy time and I’ve certainly been doing way too many walks each day and there’s not much else to do when we can’t go to cafes and can’t go out, so my toddler and I are getting lots of  exercise and checking out all the national parks  and  walking trails around. I hope you have been keeping sane and keeping well.

Today, I want to take the time to go deep into the sale market with you, rental market and go really deep into the impacts so far of this Corona Virus. Then also look at the other things that are impacting our market. What the latest stats are telling us and then some of the things to do if you’re affected. How to make the most of this time to survive and thrive ahead. So sit back and I’m going to take you through it.

Number For Sale

So in the Sale Market, the number properties for sale has decreased considerably over the last couple of months. They are now down to 12,068 properties. We’ve have a sharp decrease since March last year and with the market being shocked, what’s happened is that anyone that is a discretionary seller, as in they don’t need to sell now has come off the market. A lot of my clients that were planning to sell, I said  to them, “Hey, now it’s not the best ‘time to be on” and we’re just waiting to see how the market responds and if buyers are going to start coming back out again.

So in the home open space, we have that disallowed but we are still able to do private viewings. We are also able to use walk through videos to show the properties to people so they can get a good feel for them from the internet, but we are still seeing a lot of hesitation in the market from the buyers. They just want to know or get some certainty with both their jobs and with where the economy is headed before they jump in and commit.

There are some sales occurring each week, but you can see we’ve fallen off a cliff, we are just total of 286 sales over the last week and that’s the lowest on record since I’ve been keeping stats over for the last seven years. Prior to this Corona Virus impact, we were starting to trend back up again slowly which was nice and we can now look back and see that we were starting to get around into a slight recovery right on the doorsteps of seeing more positivity in the market.

Number Sold

I think I emailed you like in February about the positive signs I was seeing and with properties selling fast at the first home opens, Real Estate was becoming fun again but that was short-lived, a couple of weeks later we started hearing about the Corona Virus, the restrictions started happening and fears started taking hold for the most part.

We are all pretty side wiped by this whole Corona Virus, I for one in the beginning didn’t pay it too much attention, didn’t want to get trapped in that negative news, but as things started to unfold and started to impact all of our lives, we couldn’t help but see that the financial impact was going to be far beyond the health impact.

Now, thankfully we’ve acted fast, we haven’t had that health impact and we’ve limited that, we’ve announced that we need to start looking ahead to what’s the road to recovery and how long is this going to last and what’s sort of restrictions are going to remain. Can we start looking to relax a bit, those are the discussions that have started I’m sure behind the closed doors of Parliament and that’s their main focus.

As you can see, it’s been very difficult to get any property sold at the moment and that’s why I suggest just waiting and seeing if you don’t absolutely have to sell now.

Perth House Sales and Median Price

So the Median House Price was continuing to slide and this goes to December, so you can expect over the last quarter to March that’s till coming out we will have taken a further adjustment (down).

There was many suburbs that had started coming back and you’ve heard me talk about the North Coastal strip in the Western Suburbs that have been a lot more hot that a lot of the outer suburbs that were still dropping in value so you can expect with this Corona Virus, pretty much just worsens the effects that we had prior. So those North Coastal Suburbs will hold up pretty well, the Western Suburbs will hold up pretty well, outer areas I would expect to be affected the most by this.

Perth Unit Sales and Median Price

When we look at the Unit Median Price to December that was also still on a trajectory downwards and the unit price is expected to fall further to 12 to 18 months after the house prices recover.

Average Selling Days

So listings and average selling days, so you can see here and that the number for sale were dropping and so was the average selling days. We’ve had a considerable drop back in December quarter which was lovely to see but short-lived because of the COVID-19 impacts that we’ve had and are yet to show up in the stats. So this is going to be starting to get back way up there, higher than prior to when we were hit by all this, you can expect it be well above 90 days for selling time now.

Numbers For Rent

So on the Rental Market, we’ve had a continuing decrease in the number of properties for rent and we’re at 5,703 now, so that’s the least that we’ve had in quite a long time.  We were last at these levels back in approximately June 2015.  So the Rental Market is holding up very well compared to the Sale Market. We’re still readily getting the properties away.

People needing to have accommodation and if they’re deferring buying for now, we’re finding many tenants that were going to move out are renewing their leases, they’re putting back the buying decision and staying in place. Anyone that’s new to the State is likely going to rent and when it is if the borders are open up again. So I expect that there will be a strong increase in rental prices ahead and the number for rent will probably keep gradually drifting down because there’s not many investors buying and the tenants in place are staying longer.

Rental Vacancy Rate (%) 

So the Rental Vacancy rate, this is put together quarterly, so the last date that we have was to December 19 and you can see that we dropped to 2.4% and generally anything under 3% we see pressure on rental prices increasing. So that was good to see us finish out the year that way. I’m expecting that the vacancy rate will be just as tight if not, tighten up further because as you can see, the number for rent has continued to decrease.

Median Rental Price 

So the Median Rental Price had a slight rise. I’ve gone back and updated these figures, you’ll notice, I’ve zoomed in on just the house median rental price, not the median unit prices. So I’m just going to track and report on this (Houses) because majority of data is available for the house prices median rent.

So you can see that it went up in June 19 and it was at $360pw  and went up to $370pw in December 19.  So we were adjusting rents upwards and unfortunately for Investors that’s going to be put on hold over the next six months as far as existing tenancies are concerned, of course when we back to the Market, we can fetch the market rate. I expect the rental prices to strong and I don’t expect this to probably continue as rapidly up but I expect that it would at least hold its rental price.

Residential Tenancy Act Changes

So Residential Tenancies Act law changes as of yesterday, so I thought I’d come to you straight away with a summary of the changes and this by no means has all the data, I’m not going to get into the actual act (just a summary). We will be working things through to help everyone get through this period.

Our focus as a Property Management Company is definitely remaining on helping our tenants and no one wants to go through a difficult situation, so it’s a case of getting access to as much assistance as possible, keeping the communication up with your Property Manager and both parties involved.

Also remembering that many landlords have also been affected during this time and we just need to see what’s possible from both sides, so if we are coming to an agreement on a rent reduction in many cases that amount is not just a straight forgiving of the rent, we’re looking to have a repayment on the portion that is reduced, so that has to be deferred until after this emergency period (1st October 2020).

So higher payments after the 30th of September, with the reduction in the meantime. Most of the landlords have a loan, they are still required to pay the interest on this loan even if they’re able to pause that loan, they still have to pay that interest. So it’s reasonable to expect that for the tenancies that have a reduction in rent, should be paying it back later. But many Landlords are giving them a straight reduction if it’s possible within their worlds to do that and we are doing everything possible to see that communications kept up and that everyone’s helped though this.

So to changes, there’s no evictions allowed for non-payment of rent for those that are affected by hardship and I urge that this does not take away the requirement for tenants to pay rent, that debts are still accrued and come to the 30th of September, if you’re still in arrears and a new payment agreement has not been reached between all the parties, then the termination can be followed through and eviction follow through at that point.

So I don’t expect this emergency period is going to continue beyond that 30th of September, I expect that we are likely to be out of it by July. So you have to keep the larger picture in mind that this is your rental history, this is the roof over your head and we all want to really do as much as possible see that you get through this.

We are able to ask for proof of hardship or termination certificate from your Employer or some sort of proof that you had your hours reduced  and tenants are able to if they feel like they can’t continue even after negotiating a new price for rent with the owner, tenants are able to give 21 days’ notice now to end the fixed-term tenancy.

In that scenario, no penalty or break lease fees would apply, so that’s a pretty tough pill to swallow for most landlords, the chat among the investors forums has been, you know why should landlords pay that releasing fee, but under the circumstances that’s the way that the legislation’s gone unfortunately. Its very weighted in favor of Tenants and a little bit disappointing that there wasn’t a bit more of an even weighting in my opinion.

Landlords also can’t give notice to vacate at the end of the fixed term tenancy during this period, so they can’t tell their tenant to move out basically during this time. If the lease does come to an end, it will automatically roll onto a periodic lease if a new agreement for a new lease is not made.

There’s also no rent increases over this time if I mentioned earlier and this would include payment of deferral agreements, so that would have to occur after the 30th of September.

Landlords undergoing hardship do not have to carry out on an non- urgent maintenance either, so that’s a good little breathing room for some Landlords that have been struggling to pay for everything so that maintenance can be put off until the 30th of September.

Up to $2,000 Rent Relief Grant

So since I recorded my original update, the government has announce up to $2,000 rent relief grant and that’s a really good support for our tenants and owners to help bridge the gap whereby it’ll make a lot easier to agree to a rental payment reduction and the certain eligibility criteria which I’ll  pop up on the screen now.

Tenant basically needs to be in financial hardship, having lost their job and having applied for Centrelink income support, so they need to have less than $10,000 in household savings and currently paying more than 25% of their household income towards their rent.

The key part of all of this is that they have to have an agreed reduction in rent from the landlord, so by agreeing to reduce the rent, they qualify for this relief grant and helps bridge the gap and the money gets paid directly to the landlord via the property manager or directly to them if they’re not having a manager.

If there is no repayment agreement reached, you can take things to the conciliation service and providing it has gone there and tried to conciliate then the tenant qualifies for this rent relief grant. What that would mean is money paid for the grant would be money that the tenant doesn’t owe and it’ll just put them in good stead and have less money to repay later. So it also encourages all parties to come to an agreement on reduction, so a fabulous incentive and I’m really glad that’s coming out at the same time as the Residential Tenancy Act changes.

Property Clock Timing


Now, the property clock doesn’t really reflect the impact of the COVID-19 yet, you can see that it’s relatively unchanged since when I came to you in December last year.

Southwest WA now is indicated to be down at the bottom of the Market and we’ve had a few other changes around reaching its peak theoretically and Perth’s still being in this bottom phase and not around into recovery. So I definitely agree with that.

On the unit’s front, you can see that Perth was back up here, still on declining Market, so its 12 to 18 months behind the housing market.

Let’s go into some of the factors affecting our market on a bit of a deep level, so I can start to unpack this, you can see that the availability of finance, the Government has really tried to free up, as you know, when you think about it deeper that the availability of the money that people to have to invest to do things, to upgrade to keep their businesses going. It really has a huge flow on effect on the economy, so they initially started by cutting the cash rate twice since I came to you in December and its now 0.25% the lowest level in Australian History would you believe.

Availability of Finance

So small business banking has also had a big relief package announced with a hundred billion in unsecured loans available for small business and they’ve fast-tracked the approval process and put into the option in place for up to six months for payments to be deferred for some of these new loans that should help keep many small businesses afloat and get through this period which will obviously have a knock-on effect to the housing market.

Building Approvals- to Jan 2020

I’ve found some new stats I’m able to report to you now, these are to January 20 and will not include the effects of the Corona Virus yet but it gives you the feel for how we were tracking. So you can see that our approvals were still decreasing and that’s really one of the last areas to change and we’re still having negative growth of 6.7% down in approvals over the last year.

So until we kind of see that change, it will be the last thing that will start up ticking and the outer areas that have a lot of building done, that’s why they’re suffering so much because they’re demand is so substantially down.

Employment to Feb 2020


This is to February 19, again before we saw the impact of Corona Virus and we were tracking quite nicely with 1.3% for the year and 0.5% for the three months, so we were definitely up ticking. You can see here in our graph, a bit of a uptick in the annual moving average trend.

So I have to see what happens and what’s reported in the next coming few months. That was more of a positive sign that we were starting to uptick as you can see compared to our last year graph, but compared to 2012-2013 when were we’re over 4% growth we were still only tracking at 1.3% over the last year. So we still have had a way to go in terms of getting back to where we were.

Population Growth

When the jobs grows, the pollution grows, the two often go hand in hand and you can see this is till March 19, so I haven’t really still felt that impact yet of the Corona Virus but you can see that the population growth was also starting to tick up slowly as well, so that was a very positive sign. The interstate migration was trimming back towards neutral so hadn’t yet come around into the positives where we need it to be. So we need them moving into the State as well from overseas, as well as the natural increase in order for us to see pressure on House Prices again.

So we’ve had 0.4% change over the quarter and 1% over the year, so still there was plenty of room for improvement in that before we see this move around into a property recovery for Perth but it was going the right way.

Policy Changes 

Now, this is the greatest area to stimulate the economy on our recovery phase and I’m keeping an eye on what may or may not be coming. We already saw a blanket two-year extension to planning approvals which is great because anyone that had approval for projects that have had to be deferred will now still be possibly be done.

We’ve have had talks Riverside Institute WA that we are lobbying for a 75% stand for a rebate all property purchases and that would be certainly a huge stimulus to spark the recovery of the Real Estate Market. Love to see that getting through other States around Australia, also loving the similar changes. So what happens in this space over the next three to six months is going to be absolutely critical about how fast we recover and what happens to the Housing Market particularly, so watch these facts. If we can get something like that stamp duty rebate through on all purchases, I’d be very excited to be taking them to that myself as possible.

Some Tips to Survive and Thrive

So some tips to survive and thrive, speak to your finance broker at the  moment to renegotiate your interest rates or refinance through other lenders with rates being as low as they are, you can make huge savings just by going and asking the questions of your current bank

You can take it up with them directly but if you do have a finance broker, it comes across really well because by them doing it the banks will know that you’re serious about potentially moving and will be more likely to sharpen up the rate if the request is coming from the broker.

Keep in mind that if you’re going to be able to refinance, you need to be able to get valuations and that could be problematic, so start with your current bank and chat with your broker about potential for refinance and it could be worth considering tipping in some money if you’re able to significantly reduce your interest rates.

Now, if you are actually affected as business owner or employee, make sure you get all the Government grants and assistance. Of course there are options available to pause your loan for up to 6 months. There are other options to pause rates, utilities and insurance with different providers, get in touch with them if you are going through hardship and make sure you access those things quickly.

On the side of more looking at how you can make most of this market, it’s a good time to go and get your financial house in order, check your borrowing capacity, what could be possible for you in this market ahead. It’s going to be a very exciting time to look at buying both on the share market and the housing market, so I would definitely be checking in on those things as I am myself now doing.

Also, you can be really surprised when you start working your numbers because you can get a loan interest amount of 2-3%, it certainly makes things a lot more affordable when rents are at 4-5% in yields. So the actual holding cost, you have to be pretty strapped to find something that so negatively geared at the moment, positive gearing is definitely possible and a lot more possible. But keep in mind to factor in for interest rates coming up over the next 3-5 years and hopefully we’ll also see an increase in rental prices somewhat too.

My Crystal Ball

What am I seeing for the road ahead, our Markets are definitely in a state of shock at the moment and it is really is very much a case of buyers waiting to see, sellers waiting to see, everyone waiting to see.

We’re going to likely see a relaxing in restrictions, returning to a new normal over the coming three months. So we probably have the state borders to continue to be shut, with access more possible to other services and businesses. We can start going to cafes and restaurants again, potentially get more businesses going and preventing probably international travel for a while.

I would expect some further stimulus to kick start the economy on the back of this both at the State level and Federal Government Level. That’s going to be absolutely the key to seeing how long we stay in this next phase. I’m definitely seeing Rental Market continue to go very well with still a lot of activity. So I expected for the great pressure on rents increasing over this period even though we won’t get an increase to existing tenancies, the increase will definitely be there on the other side of this Emergency period at the end of September.

Sale Market I expect will hold its values because if anyone is in serious financial difficulty unlike other Global financial crisis, they’re able to pause their loans, they’re able to buy themselves time and many people that don’t have to sell up just come off market. I’m seeing that this will probably hold in prices. The speed of recovery is going to be really impacted by the stimulus and will the stimulus be targeted directly at the property market or will it be to business and other aspect of our economy. So that’s what we really need to see and I’d love to see something targeted at the property side.

So you’ve obviously gotten through to this point, I hope you hang in there and you’re doing okay with your mental state and physically well. From my family to yours, I really do wish you all the best and reach out and get in touch if you need some input both on selling and renting. We’re really doing our best to help anyone through this time and we’re getting some great results still in a difficult market.

Thanks for watching.

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