Low Vacancy Rates Make Now the Perfect Time to Invest

Low Vacancy Rates Perth

As the economy continues to recover from the effects of the COVID-19 pandemic, many investors are turning to real estate as a safe and profitable investment opportunity. One of the key factors that makes real estate such a strong investment is the current low vacancy rate in the market.

Strong demand for rental properties

One of the main reasons why low vacancy rates are a positive indicator for real estate investors is that they indicate a strong demand for rental properties. According to data from REIWA Perth's vacancy rate fell to just 0.6 percent in December, its lowest level since 1980 when the Institute began keeping these records. This high level of occupancy means that landlords can charge higher rent and enjoy higher returns on their investments. REIWA stated that "with a new record low rental vacancy rate, one of the things that WA needed most was investors who were willing to buy a property that they would lease to someone else."

Low Vacancy Rates = Lower risk of vacancies

Low vacancy rates also mean that landlords are less likely to experience periods of vacancy in their properties. This is important because vacancies can be costly, as landlords are still responsible for paying the mortgage and other expenses even if the property is not generating rental income. With a low vacancy rate, landlords are more likely to have a steady stream of rental income, which can help to mitigate the risk of investing in real estate.

Potential for appreciation

Another benefit of investing in real estate when the vacancy rate is low is that it can lead to potential appreciation in property values. As the demand for rental properties increases, so does the demand for ownership of those properties. This can lead to an increase in property values, which can provide a significant return on investment for landlords.

Strong rental market

The rental market is strong and expected to continue to be strong for the foreseeable future adding to the low vacancy rate discussion. According to a report from the Urban Institute, rental demand is expected to increase over the next decade as the millennial generation moves into their prime renting years. This is a trend that is likely to continue even after the pandemic, as more people are opting to rent rather than buy due to changing economic circumstances.

To read the full report by REIWA, follow this link.

In conclusion, low vacancy rates are a positive indicator for real estate investors as they indicate a strong demand for rental properties, lower risk of vacancies, potential for appreciation in property values, and a strong rental market. With the economy continuing to recover from the pandemic, now is a great time to consider investing in real estate. Always be sure to do your own research and consult with a financial advisor before making any investment decisions.

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