Before now, owner occupiers have represented close to 75 per cent of buyers in Western Australia*, with demand putting continued upward pressure on prices. Now, the rate of property values are rising much faster than the rate of incomes, with low-income earners such as first home buyers being priced out of the equation.
As this portion of the market tapers and market conditions remain investment favourable, savvy investors are swinging to take advantage of Perth’s opportunistic buying environment. John Percudani, Managing Director of Realmark said investors are currently appetized by Perth’s potential and promise.
“The changing contrast between values and affordability has started to affect first home buyers, which is ultimately opening new doors to the investor market in terms of buying opportunity,” he said.
“In addition, low Investor Interest Rates and affordable purchase prices are creating some of the healthiest yields of all Australian Capitals – which is an obvious attraction to investors.
“With historically low interest rates, investors are now in a position where they may earn more money in Perth property than in a Term Deposit. As an example, $1million held in a Term Deposit at 0.25%* is equal to $2,000 per annum return, whilst $1 million invested in property at an average 4% gross yield is equal to $40,000 less costs,” said John.
“WA also continues to present promising signs for its economic future. Low unemployment and positive net migration provide confidence that the tightly held rental market is here to stay,” he said.
ABS population growth data indicated WA’s population grew 1.3 per cent in 2020 – the second highest growth of all States. Net interstate migration returned to positive for the first time since 2013.
“We’re still in a phase of the market cycle where investors can benefit from a ‘first mover advantage’. Ensuring a smart property strategy at this time is key,” said Mr Percudani.
If you’re looking to acquire new property to add to your investment portfolio, or are looking to maximise the return of your current assets, ask Realmark Urban on 9388 3911 or at urban@realmark.com.au.
The above is general in nature and not intended to constitute advice. It’s recommended to seek financial advice specific to your circumstances.
^Corelogic lending data – three months January 21 vs 3 months April 2021.
*Corelogic Perth market report December 2020
*NAB Fixed Rate Deposit May 2021.
*REIWA vacancy rate data May 2021.