Why investors are turning to Perth in 2022

2 July 2022

Investors are snapping up real estate offerings in Perth, buoyed by steady property growth, unprecedented rental demand, a lack of supply and low interest rates.

Real Estate Institute of Western Australia President Damian Collins said there was plenty of steam left in the Perth market and the city was on track to deliver the forecast 10% boost to property values this year.

“REIWA anticipates WA’s strong market conditions will last for some time, largely fuelled by the state’s strong economy, 1.2% expected growth in population and the ongoing housing shortage,” Mr Collins said. “We simply don’t have enough stock to keep up with demand.

“For as long as this is the case, we will continue to see high competition amongst buyers, low median selling times and price growth in WA.”

So, here’s some reasons to consider investing in Perth:

Affordability

Perth may have experienced a 5.6% uplift in home values in the past year, but it is still one of the most affordable cities in Australia to make an investment in real estate.

CoreLogic data, released in June, shows that Perth’s median property price of $555,538 is the second lowest of all Australian capital cities. Darwin’s median dwelling value is $504,306.

Compare this with the likes of Sydney, Canberra and Melbourne where the median property prices are $1.1 million, $940,000 and $806,000 respectively, and investing in Perth really is a no brainer when it comes to affordability.

Add to that that fact that eastern seaboard markets are cooling with modest price drops in Sydney, Canberra and Melbourne, while smaller cities are still making steady growth.

Rental returns

One of the most appealing factors for investors is rental return and how much they are likely to make from their investment.

Perth’s rental yields are among the highest in the country, according to CoreLogic. The latest Hedonic Home Value Index shows the gross rental yield in Perth is 4.4% – second only to Darwin at 6.0% and is well up on the national rate of 3.3%.

Rents for houses are particularly strong in Perth. Between May and June, the annual change in rents for houses inched upwards from 6.4% to 6.6%, while units took a subtle hit from 5.6% to 5.3%.

Interest rates

We’ll be brave and address the elephant in the room – interest rates. Yes, we’ve seen some cash rate rises and yes, they will affect some property buyers in time.

Despite all the noise around interest rate hikes, they are still very low and very affordable – and any increase is unlikely to have an immediate impact on borrowers.

At the end of the day, interest rates are still incredibly low. If you’re looking for a reality check, you only need to ask anyone who was paying off their home in the 1980s how they coped with paying a mortgage with interest rates of 19%.

If a real estate transaction is on your mind, then speak with our team today.

Share:
Previous Article
$2 million house sale no longer a pipedream for Melville
Next Article
From Attadale to a global stage: Local business, Connetix, takes out top Australian toy award