Is now the right time to invest in Perth?

What a difference a couple of years makes.

There is no denying the Perth property market has been a rollercoaster the past few decades but demand for rental properties continues to grow.

With the current unpredictability of national economic conditions, many investors are wondering if now is a good time to purchase property in Perth. Here are some of the reasons why we believe it definitely is:

Post-pandemic population growth

While prices in the eastern states have fallen, Perth seems to be shifting in a different direction post-pandemic. As reported by Yahoo! Finance, this is partly because COVID-19 had a positive effect on Perth’s population growth, with many former residents returning home from overseas and Australians from other states choosing to relocate to WA when lockdowns were at their peak.

According to the Y! Finance article, “Perth experienced the highest positive net migration percentage trend of any capital city over the past two-and-a-half years, surging from 37 per cent in January 2020 to a high of 149 per cent in August 2022. Perth also accounted for a fifth of inbound moving enquiries for capital cities in August 2022, and remained on an upward trajectory.”

The population of greater Perth currently stands at 2,093,000. This is forecast to grow to 2.9 million by 2031. This larger population will need somewhere to live. If you have the capacity to buy a Perth investment property, you have the potential to reap positive rewards.

Steady prices

Perth’s property market has been relatively stable despite several interest rate rises, especially when compared to other capital cities.

For example, Sydney house prices dropped by 1.3 per cent in October 2022. Overall, Sydney home values are down by 10.2 per cent since January.

In Perth, the property price change in October was only 0.2 per cent. If you look at annual figures, Perth property prices have actually risen by 4 per cent.

While certain pockets in Perth are dropping slightly, they tend to be at the higher end of the price spectrum. There are still growth areas, particularly in postcodes that offer ‘lifestyle’ appeal and give buyers value for money.

According to BrokerNews, new listings in Perth are down by 7.1% and choice remains limited for buyers. This will help prices to hold strong.

Rental demand

When you buy in Perth as an investor, you get more for your money than in other capital cities. You also have the opportunity to generate decent rental yield, which will help cover the cost of your investment.

In Perth right now, the median rent price sits at $500 per week. As reported in the Property Tribune, the Real Estate Institute of Western Australia (REIWA) is actually calling for more property investors to help provide housing.

Rental vacancy is currently sitting at just 0.4 per cent, which means anyone buying a Perth investment property has the potential to generate excellent financial returns and choose quality tenants with great incomes.

Favourable conditions

Finally, the recent Federal Budget didn’t announce any new taxes or capital gains penalties for property investors. While incentives were focused on helping beginner and lower-income buyers to enter the market, the lack of change around investing means you can do your forecasting with confidence for the time being.

Don’t forget about your strategy

Investing with the help of a supportive mortgage broker and real estate agent is an excellent idea but you also need to take care of the property while you own it.

For help ensuring your Perth investment property maintains its value and doesn’t take up too much of your time, speak to D Residential today.

We’re a proactive property management agency in Perth. Contact us to find out more.