History of Rent & Property in WA

History of Residential Tenancies and Property Investment in Western Australia

  • 1829
    • Founding of the Swan River Colony in Western Australia.

 

  •  1885
    • Gold discovered at Halls Creek in the Kimberley region in WA’s north, triggering an ongoing gold boom and rapid economic and population growth.

 

  • 1893
    • Gold discovered at Kalgoorlie and WA attracts world-wide immigration, with consequent demand for housing both at the mine sites and Perth.

 

 

  • 1903
    • Peak of gold mining boom.

 

  •  1911
    • Deep sewerage is established in Perth – this will become increasingly important in the development of higher-density housing.

 

  •  1939
    • Rent control introduced by the Federal Government with the enactment of the National Security (Fair Rents) Regulations 1939 which empowered State Governments to freeze rents and establish Fair Rent Control Boards.
    • Increase of Rent (War Restrictions) Act passed by the Western Australian Parliament.
    • Fair Rents Board established.

 

 

 

  • 1946
    • Asbestos is introduced as a modern innovative solution to the post-war shortage of building materials and used for walls, eaves, roofs and insulation.

 

  • 1947
    • State Housing Commission formed.
      • Tens of thousands of houses built by the Commission over the following decades.
      • Many property investors will subsequently purchase these properties second-hand, refurbish and rent them out.

 

  • 1948
    • National Referendum on Rents and Prices.
      • The Federal Government attempted to increase its power over the States in regard to rent and prices of goods and services.
      • The Referendum question was “Do you approve of the proposed law for the alteration of the Constitution entitled ‘Constitution Alteration (Rents and Prices) 1947’?
      • National Referendum held on 29 May 1948.
      • The Referendum was defeated with No receiving 59% of the vote and Yes receiving 41%.

 

  • 1950
    • State Government control of rent amended:
      • Properties rented prior to December 1950 could increase their rent by 20%
      • Rent controls removed on houses rented after December 1950.
    • Mrs S Williams of Midland Junction wrote in the Daily News that the Fair Rents Board provides “courteous and helpful advice“.

 

  • 1951
    • State Government control of rent amended:
      • Rent ceiling increased by 10%.

 

  • 1952
    • Oil refinery developed at Kwinana.
      • Townsite of Medina established and the subsequent suburbs of Kwinana developed.

 

 

 

  • 1960’s
    • Deep sewerage becomes widespread in Perth as septic tanks are decommissioned and connection made to the public system.
      • The connection to deep sewerage becomes important later for higher density development of the existing suburbs.

 

  • 1970’s
    • High inflation linked to rapid price rises in housing and rents.

 

  •  1985
    • Negative gearing was abolished by the Federal Government.
      • Supply of rental properties on the market reduced and rents rose significantly.
    • Capital Gains Tax was introduced by the Federal Government.
    • Depreciation and capital works allowances created to allow a tax deduction to rental property owners for the decrease in value of their property over time.

 

 

 

  • 1990
    • High levels of rental stock and lower tenant demand combined for a record high vacancy rate in Perth and long lease out timeframes.

 

  •  1990’s
    • Zoning for residential land was increased in density across many Perth suburbs, sparking an ongoing wave of infill development, subdivision and move towards smaller blocks and houses.

 

  • 2000
    • First Home Owners Grant introduced by the Federal Government and administered by the States.
      • The Grant made it easier for people to purchase their first home rather than rent.

 

  • 2001
    • Goods and Services Tax introduced by the Federal Government.
      • Residential rental properties are input-taxed, meaning that many of the costs of owning a rental property have 10% tax added and no refund of the tax can be claimed (unlike most other businesses).
      • There is a modest inflationary effect on house prices due to the increase in building material and other input costs.
    • Stamp Duty abolished on residential tenancy agreements.
      • Property owners and managers save time and money by no longer having to take leases to the court house to get stamped and pay the tax.  Furthermore rents are more evenly distributed instead of being clustered under $125 per week which was the threshold for stamp duty.

 

  • 2004
    • Asbestos banned for manufacture and use, but remains as a legacy issue in most existing housing stock built prior to this date.

 

  • 2005
    • Strong growth in Perth house prices and rents driven by housing demand as migration to WA hits new highs.

 

  • 2007
    • Perth median house price peaks at close to $500,000.

 

  • 2008
    • National Rental Affordability Scheme commenced by the Federal Government.
      • Tax incentives for investors to buy newly-built rental property and lease it at below-market rents.
      • The abundant money in the scheme and associated development and marketing lead to corruption and malinvestment.

 

  • 2009
    • Efficient Energy Homes Package launched by the Federal Government.
      • Roof insulation supplied and installed for free was part of the package, and utilised by many property owners.
      • Hard-wired smoke detectors in residential properties become compulsory.

 

  • 2010
    • Home Insulation Program ended after the separate deaths of four installation contractors.

 

 

  • 2012
    • Rental shortages due to tenant housing demand from the mining employment boom across WA.

 

  • 2013

 

  • 2014
    • Start of a five year decline in the Perth rental market due to lower tenant demand.

 

  • 2015
    • Land tax rates increased significantly by the Department of Treasury.
      • Land tax now becomes the highest operating expense for owners of large property portfolios.
      • Some investors sell rental properties as the combination of falling rents and high tax reduces investment viability.
    • Australian Securities & Investments Commission commences a review of interest-only lending for residential property investment.
      • ASIC’s focus on interest-only home loans will continue for several years and lead to restrictions in interest-only lending.
    • Perth rental vacancies rates hit record highs.

 

  • 2016
    • Credit cycle begins to tighten as lenders fear over-lending to the residential investment sector.  Investors find it increasingly hard to get a loan to buy a property, to develop, or to re-finance, in particular for interest-only loans.

 

 

  • 2018
    • Fencing material Hardifence ceases production, leading to delays in fence replacement and increased costs for owners who need to replace entire fencelines with Colorbond, the alternative fencing material.
    • Methamphetamine use and manufacture rises across WA, with rental property owners being affected with high clean up costs.

 

  • 2019
    • Perth rental market shows signs of strength, vacancy rate falls.
    • Family violence changes proposed to Residential Tenancies Act 1987.
      • Tenants affected by family violence will be able to exit leases early without having to reimburse the owner for the costs and losses incurred by breaking the lease.