Perth is firmly back in property investors’ sights with recent Australian Bureau of Statistics lending data showing increased investment activity in Western Australia over March.
That’s after the total value of investment loan commitments grew 3.5% to $642 million over the month when compared to February.
While that’s slightly shy of its recent peak in March 2022, it’s a massive 158.9% jump from its February 2020 value, pre-pandemic (as the graph above shows).
You don’t have to look far to see what’s drawing investor interest.
For one thing, Perth is currently one of Australia’s strongest property markets with median prices increasing 1% over the three months to April from the previous quarter, according to CoreLogic.
This growth means the city has recovered all of its recent declines, with dwelling values now sitting at a record high of $572,800.
For another, Perth’s relative affordability means investors can buy properties with good investment potential at a lower price point than in the east coast markets.
Perth rents are soaring
But Perth’s price gains and affordability aren’t the only factors working in its favour. The city also has one of the tightest rental markets in the country, with a vacancy rate of just 0.6% in April, according to SQM Research.
With just six out of every 1000 rental properties available, asking rents have soared, growing at an annual pace of 17.7% in the year to 12 May.
As a result, the rental market was offering strong rental yields of 4.88% in April, making it the second highest-yielding capital city in the nation, just behind Darwin, according to CoreLogic.
It’s likely the city will continue to offer significant rental returns for investors given Western Australia’s position as one of the nation’s strongest economies.
WA’s booming economy
The McGowan Government expects the state’s economy to grow at a blistering pace of 4.25% in 2022-23, the highest growth in nine years.
By comparison, the Reserve Bank of Australia has pencilled in GDP growth of 1.75% for the country as a whole.
A strong economy means a strong labour market, with WA’s unemployment rate averaging just 3.4% over the 12 months to March, its lowest level since 2009.
In turn, that’s seen wages grow at their fastest rate in a decade, attracting interstate and overseas migrants to WA. As such, demand for rental housing should only grow further.
Looking to buy an investment property in Perth? As an expert Perth buyer’s agent, Resolve Property Solutions can help. To discuss your options, book a free strategy call with Peter Gavalas.