Preliminary data from the Real Estate Institute of Western Australia shows that the vacancy rate for rental accommodation in metropolitan Perth dropped to 2.3% in the three months to February.

The tightening in the market has seen the median rent for units, apartments, villas and townhouses increase by $10 to a median of $390 per week. REIWA President David Airey said, “We have seen the volume of property listed for rent fall 24% since the start of the year, from 2,900 homes to 2,200 at the end of February,” Mr Airey said.

Peter Arscott, Principal, Raine & Horne Canning Vale, says a shortage of rental properties is also driving up rents in his region. “We’re achieving great rents over the last six months,” says Mr Arscott, who is also the Principal of Raine & Horne Kenwick. “Over the last half year, average rents for in Canning Vale homes have jumped by around 7%.”

There is also good news for owners and buyers, with a shortage of new homes set to underpin Canning Vale values long term. “There’s not as many people building homes as there was five years ago,” adds Mr Arscott, who confirms there is already evidence of slow capital growth for Canning Vale homes.

Mr Arscott, whose team at Raine & Horne Canning Vale grabbed second place in the hotly contested ‘Top Office – Number of Sales’ category at Raine & Horne Western Australia’s state awards held recently in Perth, said that the state government could take some steps to help speed up real estate growth. “I’d like to see the state government scrap the stamp duty impost,” argues Mr Arscott, whose team at Raine & Horne Canning Vale also placed in the top three offices for the dollar value of its sales in 2011. “This would encourage more empty nesters to make the move to smaller homes and help ramp up real estate market activity in WA.”

In Thornlie, an outer suburb of Perth, it is first home buyers who are driving the real estate market, where entry level homes start from $350,000. “This buys a three bedroom, one bathroom house on a 750 sqm block,” says Kerryn Lawrence, Principal, Raine & Horne Thornlie, who adds that Thornlie’s excellent transport services are a significant attraction for first home buyers. “We’re around 18 kilometres from Perth, and with first-rate train and bus services, as well as easy access to numerous freeways, it’s a fast commute to wherever you want to go.”

However Ms Lawrence says price stability is the major appeal of Thornlie real estate. “Our real estate market seems to hold its value,” says Ms Lawrence. “I think this is a function of the affordability of housing in Thornlie which continues to attract first time buyers, and as a consequence helps to underpin the upgrader markets.”

WA home shortage to underpin long-term values