Exceptional incentives

Agents are offering exceptional incentives to get tenants into vacant city offices.

Private education company Navitas recently moved its main offices from Mount Pleasant, south of the city, onto the main financial strip on St Georges Terrace.

Navitas chief executive Rod Jones said the rent was comparable to what the company was paying at the much older offices.

"Everything you see around you was done for free – a $5 million fit-out," Mr Jones said.

The high vacancy rate in Perth has been attributed to large reductions in office requirements by the under-pressure mining sector and affiliated businesses. Philip Gostelow

Residential rents are also falling. Perth residential vacancy rates have risen to 4.9 per cent, according to the Real Estate Institute of Western Australia (REIWA), just three years after an emerging rental crisis occurred in Perth where vacancy rates dipped below 0.7 per cent.

Buyer's market


The number of houses, units and blocks of land for sale in metropolitan Perth has now surpassed 14,000.

Most property experts believe equilibrium is achieved in Perth's residential market when there are about 12,000 properties on the market, which means it has swiftly transitioned from a seller's market to a buyer's market in less than a year.

Craig Kelson, of Kelson Real Estate in Carlisle, south of Perth, said many sellers were pricing their $500,000 to $600,000 homes about 5 per cent too high.

Agents say it's a tenant's market in Perth. Philip Gostelow

"You have to price a home spot on or people won't even turn up to the home open," Mr Kelson said.

"It feels just like a recession."

Most pain

Given there has been a spate of building activity that has only recently subsided, some of the most pain is being felt among those who subdivided properties and are trying to now offload several identical homes into a subdued market.


Western Australia is about to enter its third consecutive year of shrinking state final demand, which measures consumption and investment but not exports. The resource-rich state's strong level of exports means it is not in recession, even if parts of the market have recession characteristics.

Bankwest chief economist Alan Langford said the loss of high-paid jobs in the state was affecting spending.

"We have been hit by the loss of the high-wage jobs that go with the construction phase of mining projects," Mr Langford said.

"You are seeing that in reduced household consumption."

Perth's median house price is about $550,000, according to REIWA, which is the same price it has hovered at for about the past 18 months. This compares with the rapid price increases being experienced in Sydney and Melbourne.