Perth has emerged as the hottest destination nationally for smart property investors seeking the highest return on their investment according to Stuart Cox, WA General Manager of Australia’s premier real estate services provider, The Agency Group.
Based on a recent CoreLogic report, “East or West? Australia’s best place to invest”, Perth had the highest gross rental yields among any state capital, at 4.9%, and was one of the best places in the country for capital gains.
This is despite WA having low rates of investment activity with only 28% of investors accounting for new mortgage commitments in the state – the second lowest figure nationally, only ahead of Tasmania (24.5%), according to the report.
Commenting on the report, Stuart Cox said significant prospects for capital gains should lure property investors away from the major cities on the East Coast to Western Australia’s capital in the near future.
“Perth has emerged as the destination for smart property investors seeking a top return on their investment. When you factor in the higher yields and higher capital gains compared to bigger cities on the East Coast, it is obvious that Perth should be the hottest market in Australia for property investment."
“What also makes Perth so appealing from an investment perspective is the buy-in price is more achievable. Despite a recent record median price in July of $560,000, it remains the lowest median of all state capitals with a significant number of affordable metro suburbs below the median price."
“I believe that while property investors have historically focussed on Sydney and Melbourne markets, despite low rental yields and higher buy-in prices, the opportunity for significant rewards from investing in the Perth property market can no longer be ignored and I expect Perth to witness an influx of property investment across the board soon.”
Economic factors assisting property market
The Perth property investment market has also benefited significantly from a range of economic factors including strong employment, strong wages growth and international as well as interstate migration.
Western Australia’s employment rate has increased solidly over the past 12 months to 30 April 2023, up 2.7 per cent, with the unemployment rate averaging 3.5 per cent, which is very low by historical levels and the second lowest of all states.
In addition, Western Australia has experienced highest population growth in the country in 2022, up 2.3% over the course of the year.
“We are seeing an influx of both interstate and international migration into the state which is resulting in both higher purchasing and rental demand pressures,” Mr Cox said.
Mr Cox added the RBA’s recent decision to hold interest rates at 4.1% amidst easing inflation will provide a boost to consumer sentiment and in turn property investors nationally.
To access a copy of the CoreLogic report, please click here
About The Agency
The Agency Group Australia Ltd (ASX:AU1) is a major ASX-listed real estate services company which exchanged over 5,700 properties worth a combined $5.9 billion in the 2022 financial year. From humble beginnings with one office in the Perth suburb of Doubleview, the Group has grown to become a national force in real estate with multiple offices located across six states and territories.
The Group’s national operations are serviced by major offices in Perth, WA and Bondi Junction, NSW. The Agency was established with a unique model, centralising support within its major offices to eliminate inefficiencies within the traditional franchised office model. Cost savings translate to greater value for agents, incentivising them to do what they do best – sell properties – and further enhance agent recruitment. The Agency’s unique, scalable business model continues to disrupt the real estate services industry in Australia.
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