Western Australia is often overlooked when it comes to property investing. With most of Australia’s population residing on the eastern seaboard, it appears the saying ‘out of sight, out of mind’ rings true for the city of Perth. However, it’s important not to overlook key characteristics of the Western Australian market which appears to be advantageous for investors in 2023.
In November 2022, investor lending in Western Australia fell to $635m, down 12.9% from its recent peak in March 2022 (according to the latest Australian Bureau of Statistics data). Whilst this would predict that investors have reduced in the area, the effect of eight interest rate rises may have influenced this sector more than we think. Additionally, a reduction in investor lending has reduced across the country – therefore we believe it’s not specific to the Perth market.
However, here are the reasons why it’s a good idea to invest in Perth in 2023…
· Perth’s rental market is one of the most competitive in Australia, with the number of available rentals dropping to a
historic low in December, according to Domain’s latest rental report.
· Median house rents in the December quarter rose 6% quarter-on-quarter to $530 a week.
· Gross rental yields are at an all-time high of 5.31%
· The entry price for property in Perth is considerably lower than the eastern seaboard – hence the record high yields.
· The Real Estate Institute of Western Australia has forecast growth of up to 5% in Perth’s median property price over 2023.
In our view, Perth is currently undervalued. Savvy investors will be taking the opportunity to dive into the Perth market in 2023.
What are your thoughts on Perth as an investment hotspot?
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