"SLEEPY" MARKET THRUST INTO INVESTMENT SPOTLIGHT!

Wallowing in the property market doldrums for the last 10 years, Perth has suddenly shot back into the spotlight with some of the country’s strongest price growth and fastest-rising rents.

Last year, it was the lowest-ranked Australian city in Knight Frank’s Prime International Residential Index, with the annual price growth of luxury homes a sluggish 0.9 per cent.

Now, it’s the top city, at 3.6 per cent, compared with the Gold Coast’s 3.2 per cent, Sydney’s 1.1 per cent and Melbourne’s 0.9 per cent.

The flood of people from the resources industry, support businesses and financial services helped squeeze the rental vacancy rate from its old 7.7 per cent to less than 1 per cent today.

Perth property in most price ranges looks currently undervalued, with the rebound being felt across the luxury and mainstream markets.

Recent research by the Real Estate Institute of Western Australia (REIWA) also found that the current vacancy rate of 0.8 per cent is a 40-year low.

“Usually, in that kind of situation, you’d expect investor finance of about $1 billion a month,” said REIWA president Damian Collins.

“But right now, investors are thin on the ground. They’d normally be 40 per cent of buyers, but now they’re down to around 20 per cent.”

“I think the moratorium on increasing rents on existing tenancies because of COVID-19 put them off, but now that’s lifting on March 28. Then we need investors to come back as we’re in the middle of a real rental crisis with so few properties. Our growth yield is particularly good too at about 5 per cent, compared to 3 to 3.5 [per cent] for Sydney and Melbourne.”

If you’ve been thinking of entering the property investment market, get in touch with our team to discuss how we can help with your journey.